SimpliFlying

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A recent article on The Sietch Blog claims that Virgin Atlantic is “on the brink of collapse”. The argument is based on Sir Richard Branson’s recent statements in the press about the threat posed by the BA/AA collusion. On this, an un-named source has commented that it reflects that Virgin Atlantic is in trouble.

Whether Virgin Atlantic, and their sister companies Virgin America and Virgin Blue can ride out the storm depends on many factors, but at the moment things are not looking good for the former wunderkind of British industry. The “budget house of cards” won’t stop toppling for some time yet.

Prevention is better than cure

In fact, Branson’s comments show Virgin’s preparedness for the upcoming threat and they are dealing with it head-on. Forbes Magazine revealed in an article that Branson unveiled last Friday the slogan “No Way, BA/AA,” which will be painted on the side of Virgin’s aircraft. This campaign will alert consumers to the “anti-competitive” nature of the proposed tie-up, which Virgin hopes will then indirectly put pressure on American antitrust regulators.

Virgin is a trusted brand

Virgin Atlantic is one of the few airlines in the world with a sound business model (first class service at business class prices) and an outstanding brand image. Most importantly, Branson is an icon people can relate with. Customers trust the Virgin brand, and this brings loyalty. They will not ditch a loved brand easily and Virgin is likely to further strengthen its position an industry leader once this crisis is over.

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On 11th August, the pilots of Delta and Northwest agreed to the proposed merger between the two airlines, smoothing out the way for a new world’s largest airline to emerge. What does this mean for American and international commercial aviation world? A peek into history may give us some insights.

The glory of Pan-Am

The decline and demise of Pan-American World Airways in 1991 marked the end of an era in United States. Pan-Am was, for many decades, the de-facto flag carrier of the United States with an extensive international work. It was arguably the creation of American politics in the pre-deregulated industry before the early 1980s, as the airline flew international routes while other airlines were largely restricted to domestic routes.

For over three decades after the Second World War, Pan-Am held the stature as the leading international airline in terms of innovative products, as well as opulence in luxury travel, ushering in the jet age by launching the Boeing 707 in 1959, the iconic Boeing 747 in 1969 and record-breaking non-stops between New York and Tokyo, and Los Angeles and Sydney with the Boeing 747SP in 1976. Pan-Am also pioneered business travel with the launch of its clipper class, a market that was to become today’s lucrative business class. Pan-Am was a brand that Americans flew with pride - hardly a case with US based airlines today.

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Image via Wikipedia

In service businesses like airlines, first impressions count. On my hour-long American Airlines flight last evening from Toronto to Boston, I was welcomed on-board by a cheerful flight attendant, Heather. She was genuinely pleasant (and not over-doing it) and extremely courteous, even though she was the only flight attendant on board the small Embraer jet. She played along when people were not paying close attention to the safety demonstration, and cracked jokes while serving beverages. A very pleasant experience - but that’s just one tenth of the job done for the airline when it comes to creating first impressions.

Creating lasting first impressions - a hundred million times

Air Canada’s Robert Milton mentions in his book that on average each passenger comes in contact with the airline ten times, every time he flies. This may be through the call center, website, at the check-in counter and of course, on-board the plane. So if an airline flies 10 million passengers per year, there would be a total of 100 million interactions on average! So how can airlines create a lasting first impression, every customer interaction? Here are three ways.

1. Exceed expectations. Before a customer interacts with an airline, he has certain expectations formed through advertisements, word-of-mouth or previous experiences. Airlines should aim to exceed them. Reduce the waiting time at the call center. Have pleasant check-in counter staff. Cater to the fliers’ needs on-board. This is not to say that each and every airline must spend millions in sprucing up service levels, but rather exceed the expectations they have set themselves. For example, budget airlines like AirAsia promise on-time performance and not in-flight luxuries. They then ensure these metrics are adhered to. Airlines like Thai Airways and Qatar Airways promise a pampered service for their business class passengers, and then deliver it. Prioritize, then execute and keep the word. Read the rest of this entry »

   

   Tags: AirAsia, American Airlines, Robert Milton, Virgin America
   

Here’s a quiz:

1. Which airline tested wi-fi for the first time last week?
2. Which airline will be testing bio-fuels next month?
3. Which airline is the first to have showers in its first class?
4. Which is the first airline that’s going to fly the Boeing 787?
5. Which airline was the first to fly the A380 aircraft?

Almost anyone who’s traveled on an airplane before would be able to answer the last one – Singapore Airlines. But hardly any would be able to answer the other questions. For the curious, American Airlines tested wireless internet last week, Japan Airlines will test bio-fuels, Emirates will have showers on its new A380 flight to New York city and ANA will be the first to fly the 787. Wondering why the huge disparity in awareness? Simply because Singapore Airlines engaged its customers and let the world know that it was doing something new.

Being the first brand to give customers a refreshing, new experience is something to beat the drum about. In turbulent times for the industry like these, airlines should take the opportunity to let the world know about every new initiative they are taking. Let alone the need for a Singapore Airlines’ style big bang, something more than a simple press-release is likely to be lapped up by thirsty customers. What if American Airlines had created a contest, where winners would be able to use the wi-fi service free? How about Japan Airlines doing a marketing stint with Al Gore, highlighting the importance of using bio-fuels? May be Emirates can give its top frequent fliers a chance to experience those showers, even before the first flight.

Not only will such activities create loyal customers, but the buzz created will be more than enough to offset some of the flak airlines have been receiving lately due to the additional charges being imposed. Being the first to provide additional value to customers is not very common in the airline industry, and when it happens, airlines should capitalize on such an opportunity.

Did you know that a number of United Airlines’ planes have added iPhone and iPod support? Again, the answer is probably a resounding “No”.

Time to wake up! And beat the drum about it.

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Everyone is now aware of the much criticized move by American Airlines to charge $15 for the first checked in bag, and $25 each for subsequent bags - a perfect example of the knee-jerk reactions we are getting used to from airlines. This is a one-way street for the passenger. What if oil goes down to $100 in two months? Surely the baggage fee will not be reduced. Sounds like a perfect recipe for disaster for customer confidence (if there is any left now).

Photo courtesy of http://www.worldrider.com/

Surely, there are better ways to deal with externalities than to squeeze out every nickle-and-dime out of the already exploited passenger. Airline executives in the US can learn some things from their counterparts in Asia (who’re still doing well in this environment) and also take some lessons in Economics. Here are three tips to get started: Read the rest of this entry »

When an American Airlines passenger died in-flight earlier this year resulted in a public outrage, the airline’s attempt to rescue its reputation fell flat on its face. Two days after the death, American Airlines decided to honor a stewardess for saving the life of a passenger on board a flight - three years ago!

What already sounds like a bad attempt at generating positive PR turned much worse when the stewardess blatantly rejected the award, at the ceremony, instead spilling the beans on bad management practices at the airline. All this in front of shocked executives and ever-eager media. Check out the stewardess’ interview with MSNBC, after the incident.

So what’re three key lessons from this blunder for American Airlines and others? Read the rest of this entry »