At the Aviation Outlook Summit in Sydney early this month, where I delivered a keynote on airlines + social media branding, the first day was mostly doom and gloom whereas the second day was much more up-beat. Not surprisingly, executives from legacy carriers like Qantas, Air New Zealand and the European Commission spoke on the first day, and up-beat executives from rising stars like AirAsia X, Oman Air and Gold Coast Airport spoke on the second day. That got me thinking…are legacy airlines dead? I now believe they are. Here’s why.
1. Legacy airline brands come with legacy baggage
Unions, legacy systems, government bureaucracy, old planes, old workforce, high costs, bankruptcy… these are all words that can be easily associated with Air India, Alitalia, Japan Airlines, Air Canada and many more legacy airlines. And these are all aspects that do not allow these airlines to function efficiently in the current climate.

The airline industry has evolved drastically in the past decade. With each new shock (9/11, SARS, H1N1…) we see new stars emerging, which have streamlined costs, efficient operations and specifically targeted markets they go after. And they beat the hell out of monolithic airlines that legacy carriers have become. Just read …

Continuing this week’s Cathay Pacific Special on SimpliFlying, I’d like to share some of my own ideas on how the forward-thinking legacy airline based out of Hong Kong can add wings to their People micro-site through social media.

As mentioned in my review of the website earlier this week, the site not only features informal bios written in first person, but also formal and informal shots of everyone from flight attendants to baggage handlers. It’s good for getting acquainted with the faces behind the scenes at one of the world’s best airlines. But as I browsed through the profiles, I felt I wanted to do more…I felt like literally getting in touch with some of these people, with whom I could relate to. So here are three proposed next steps for the Cathay Pacific people micro-site.

Allow active interactions among visitors: One of the key enablers of engagement in social media is that anyone can share his or her thoughts about anything, in public, and garner responses. On the People site, visitors can currently share the URL on …

Think about this. You’re being helped by a very courteous flight attendant on your flight from New York to Mumbai, via Hong Kong. But there’s no way that you’re ever going to meet her again. You want to know her better, but there’s just no way. Or how about that Customer Service Rep who was so helpful over the phone in helping you change your flights? Again, he was no more than just a voice.

That’s partly because airlines have acted like faceless organizations all this while. You seldom get to interact with the people behind the brand. And that’s exactly what Cathay Pacific has tried to overcome, with their micro-site showcasing its people.

Meet the people – in a different light
On the people site, you can get to know better not only Cathay’s customer-facing staff like the Pursers or the Customer Service officer at the airport, you can learn just as much about the cargo handlers and the aircraft dispatchers. The flash-based interactive website literally has people “flying around” and once you click on them, you encounter two …

Singapore Airlines has created probably the most well recognized airline brand in the world. The Singapore Girl has done great wonders for the airline and the nation over the years. Even ardent competitors like the CEO of AirAsia, Tony Fernandes, openly claim to be learning from the airline.

But the recent tough times have hit the airline hard, just like other premium carriers like Cathay Pacific. Singapore Airlines has decided to cut over 200 flights and is experiencing low load-factors in its premium classes – where it makes most of its money. So the big looming question is what should the airline do now? Change strategy? Probably not. How about using social media to soften the impact, by engaging the customers and employees real-time? Why not?
You can run, but you can’t hide
In my conversations with folks over at Singapore Airlines (quite a few of them!), I’ve sensed educated-nonchalance when it comes to adopting social media to pursue its business goals in this downturn. Not only are they hardly present on social media outlets, the airline seems unconvinced about the importance of a two-way conversation. SIA doesn’t have a blog, Twitter account, Facebook page or even social-media-friendly press releases (I …

Image via Wikipedia

I’ve had the opportunity in the past few months of interviewing a number of distinguished thought leaders in the aviation and branding industry over the past few months on SimpliFlying. But a recent encounter in New York has left a deep impression on me, since this brand leader’s ideas truly resonated with what I’ve been writing about technology branding for airlines lately.

I’m referring to my conversation with Joe Crump, the VP of Strategy & Planning at Razorfish – the leading digital branding agency. At one point in the interview, he predicts that “any airline that doesn’t go digital pretty damn quick is going to find itself obsolete”. And he has 25 years of experience in branding and technology to back up his foresight.
Airline branding – “genuinely complicated”
In his interview, Joe shared that the fundamental problem of the airline industry is that “of over-promising and then inconsistently delivering”. And this is mainly because of the number of externalities airlines need to deal with – from fluctuating …

….
Image by pchavali via Flickrllkl
There’s been ton of chatter that Qantas is looking for a bedmate even since the new CEO Alan Joyce took over. Finally, British Airways CEO announced that the airline is in talks with Qantas regarding a potential merger. On the surface, it may look like a good deal, since there are so many synergies to tap on the famed Kangaroo route. But dig a little deeper and you will realize that Qantas may just become a concubine for BA, rather than a trusted mate, and it might just make sense to keep the options open towards airlines like Cathay Pacific.

But before I get into that, let me share my thoughts on why a Qantas and British Airways is still good for both the airlines.
Why QF and BA make a good couple
The goal of mergers is to generally extract value by streamlining operations. But Qantas and British Airways (BA) can probably hope for much …

Airlines often showcase their First Class products to set themselves apart, and attract masses’ attention. After all, it provides great brand leverage, as many people aspire to get there one day and fly First. But First Class is either a dying flying style, or has gotten more exclusive than ever before, depending on how one looks at it. With the relentless piling of more luxury and space to the in-demand and lucrative business class, a number of airlines have done away with First Class on many routes. This article hunts the remaining First Class products where the very best is offered to the most privileged. First Class provides the passengers with what is the scarcest, and thus most exclusive, on-board an aircraft – Privacy, Space and Novelty.

Emirates Airlines First Class
First available on its A340-500, Emirates’ suites presented a novel idea of flying – enclosing the passenger with a door to create ultimate privacy. Although the seat is smaller and narrower compared to the newer SIA’s suites, Emirates’ suites are more elaborately furnished and still one of the world’s finest way to fly. Emirates wins my applause in providing showers for First Class passengers on-board their A380. Safety issues aside, I cannot recall how many times I had wanted a shower on a long flight before I settle down to sleep. A novelty with a strong dose of practicality – one of the few things rarely seen from Emirates in these days. Privacy: 9/10, Space: 7/10, Novelty: 9/10

[caption id="" align="aligncenter" width="420" caption="Singapore Airlines First Class Suites, with immense privacy too"]
Smaller but very tastefully decorated private suites on Emirates

Singapore Airlines First Class Suites
Available only on the A380, the Singapore Airlines Suites are slightly wider and larger than Emirates’, the pioneer to a room-suite seating concept on a major commercial airline. The 35in-wide seat transforms into a 27in by 78in bed. The ultra rich can opt to book one of the two pairs of adjacent suites and transform a pair of suites into a huge room with a double bed. The doors, however, are translucent and do not extend to the ceiling.  Privacy: 8/10, Space: 9/10, Novelty: 9/10

[/caption]

Cathay Pacific Aiways has come up with a brilliant initiative to allow prospective customers to experience their new cabins online. Dubbed “try before you fly”, web surfers can choose between having a male or a female guide, and then choose between the First, Business or Economy class. The best part is that they can either choose to be “shown around” by the guide, or explore the photo-realistic interiors themselves.

Try before you fly
Once a surfer is in a particular cabin, he or she can test out the different conveniences in the cabin with the click of a mouse – and these include common activities like working on a laptop and going to sleep. When doing the latter, the seats recline fully and cabin lights are dimmed. One can also walk around the plane and explore different cabins. When that’s done, one can step into the flight simulator and choose to experience landing at one of the many international airports Cathay Pacific flies to – including New York JFK and Hong Kong. As if that’s not enough, surfers can even enter a competition to win business class tickets to Hong Kong to try out their real flight simulator. How sweet is that?

The recent spate of airline mergers – or merger talks – begs the question: Is it better for the industry if two airlines merge or one of them goes bankrupt. Verdict: It’s better if an airline goes bankrupt.

Here’re three reasons why bankruptcies are good for the industry overall.

Increases industry revenues. Many airlines are not making money because fares are too low, compared to costs. More bankruptcies mean less price competition for the remaining airlines. They can then raise fares with less fear of undercutting. This would help them cover costs, and increase profits for the industry overall. Cathay Pacific was able to optimize flight times between Hong Kong and Vancouver after Oasis HongKong went bust.By contrast, in mergers, the new combination of airlines takes long to rationalize routes, and when they do, they still charge low rates since fares never really increased the way they could have, due to sudden disappearance of competition from a route.
Dramatically lower costs. When airlines close for business, they lay off a large number of people. These people increase the labor supply in the market, and are hired by other airlines at lower wages. This reduces the overall wage component of the costs. When airlines go bust, they also get rid of their planes at very low prices. They are sold to other airlines, which can then put them on their under-serviced routes. Again, reducing the cost of the equipment. AirAsia is a great example of an airline, which inherited two planes with just a $0.50 down payment, and  was able to tap on the abundance of cheap labor, right after 9/11.

The airline industry is one in which there are a lot of externalities – situations beyond the control of individual airlines, which they have to deal with. These may include events such as 9/11, weather conditions, pilot union trouble or even the bankruptcy of a competitor. Though on the face of it, these may all seem to bring trouble, but if leveraged well, these externalities can lift the airline brand in a number of ways. This is because almost always, a number of airlines face a similar macro-situation simultaneously, but it is those who deal with it well who come out triumphant.
Here are three examples of how airlines around the world have been resilient in the face of externalities.

Olympics in Beijing? Let’s send the A380 there. To capitalize on the increased travel demand to Beijing during the Olympics, Singapore Airlines recently announced that they will be flying the A380 to Beijing during this period. What a perfect example of dexterity. Not only will SIA be able to showcase their …