Game over, Air India

As I mentioned in a previous article, Air India contributes 10% of global airline losses with just 0.35% of global traffic (stat. from Bangalore Aviation). To rescue the airline, hundreds of millions of taxpayers’ rupees are required over a long period of time. And even then, a profitable airline cannot be guaranteed, especially one that is mostly run for, and by the government and bureaucrats.

Even if you can gloss over the fact that lots of money is required to rescue Air India, the ideas for the turnaround that have been proposed till now have been far from convincing. Repositioning Air India as a low-cost carrier, with sky-high employee-to-plane ratio, aging fleet, poor plane utilization and lethargic execution, is at best an ill-conceived dream.

Till date, Air India has filled its planes either with politicians, or by selling dirt-cheap tickets that hardly cover the costs of flying. And these are both unsustainable practices. And with the uphill battle to rescue the airline, I suggest Indians let go and move on.

Why Emirates is the de-facto national carrier?

Emirates not only operates many times the frequency to all of Air India’s international destinations, it offers way better service and is already the leading international airline out of India from a number of major cities, ahead of Singapore Airlines, Lufthansa and KLM.

For the true aviation geeks among us, let me share some statistics* about Emirates’ operations since they started the daily Dubai-Los Angeles (LAX) and Dubai-San Francisco (SFO) services on May 1, 2009.

• EK is the leader in market share to MAA/BLR/HYD/COK to/from LAX.
• Outsold CX, AI, LH, BA and SQ to BOM from LAX. Has # 2 market share on this route behind Korean Air.
• Ranked #6 in market share on LAX-DEL route behind OZ/LH/CX/SQ/CI.
• On SFO-BLR sector, ranked #3 in terms of market share; outsold LH and BA on this route even though LH has a daily same plane SFO-FRA-BLR flight operated with a B 744.
• On SFO-BOM sector, ranked #3 behind CX and KE in terms of market share; outsold SQ/BA/LH/AI.
• Market share leader on SFO-HYD sector, outsold LH 3:1 and SQ 2:1.
• On SFO-MAA sector, ranked #3 in terms of market share behind SQ and CX; outsold LH/BA each by 2:1 margin.

Imagine what will happen once Emirates starts flying its high-capacity A380s to Indian routes, connecting seamlessly to all over Europe and North America in the next few years. No other airline, even if they’re part of alliances, would come close to beating Emirates in terms of capacity to India. Hence, I rest my case that Emirates is serving the purpose of a national carrier to India.

What about the residues from Air India?

The Hindus in India submerge the ashes of someone who’s passed away in the Ganges river. Metaphorically speaking, the same should be done with Air India.

The Indian government should take a leaf out of the Aussies. When Ansett perished, the good parts were taken up by Qantas and the rest forgotten. Similarly, once Air India stops operations, the planes can be sold to other Indian carriers like Jet Airways and Kingfisher. Most of the additional capacity would certainly be absorbed by the slew of quality LCCs in India, like SpiceJet and Indigo.

As for the large number of employees, if they can’t find jobs with local or foreign private airlines, I’m sure the Indian Railways can come to the rescue, which is already the largest employer in the world. And the railways still carry more people per day in India, than the airlines do in a year.

Indians should realize that by forcing Air India to stay alive, they’re not helping anyone. Good money is chasing bad money. The politicians are still making merry and the service standards still remain hopeless compared to competition.

What are your thoughts about how Air India should be dealt with? Is letting the airline fizzle a practical solution, or do you have better ideas? Let’s discuss in the comments or over on Twitter (@simpliflying)

*Statistics: Special thanks to Ojas for sharing this data on Airlines.net

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Emirates Airlines – which pitches itself as one of the best in the world, joined Twitter at the start of the year, and posted 19 updates about their destinations – all on the same day (see pic below). And at the other end of the spectrum, JetBlue does quite a good job of engaging over half a million of its followers with a mix of witty remarks, contests and deals. But all of them seem to be figuring out what to do. So here’s an analogy that might explain things a little.

Why Social Media = BBQ Cookout Party

At a BBQ cookout party, people are with those they trust, with those they consider friends. They give advice, seek advice (often on BBQ cooking), share thoughts and stories, laugh a little and have fun. What they DO NOT do is only talk about their company’s product updates or swipe a credit card an buy products.

Much of social media is like a cookout. People hangout with many they know on Facebook – hence their ability to open up so easily. On Twitter, people are either imparting knowledge, gaining knowledge or sharing quick thoughts with their “followers”.  And mixing direct selling is not good in such a situation.

So how did Dell make $1 million off Twitter?

But then, Dell announced recently that they had made $1 million by selling their products on Twitter. How did they do it? They have a dedicated channel (@delloutlet) which clearly tells its followers that it will only have offers. Once the expectations are set, then people expect the same and even the followers are those looking for deals, not for help setting up their computer! And that’s where airlines are failing.

Lufthansa also started a Twitter account recently. A friend from Switzerland wrote to me, “Lufthansa is just posting auctions. There is no added value for customers and no involvement except monetary incentive.” This is a perfect example of not setting the right expectations, and hence creating disappointment among followers. They’d have done much better, had they gone with an @lufthansaAuctions account name. Don’t you think?

I don’t think indiscrimanately selling on Twitter is going to work. It might hurt the brand even more. It’s like going to a cookout, and then trying to sell your software with a discount.

Having said that, there’s a reason why Tupperware parties exist and why @DellOutlet made dell a million bucks!

What do you think? How should airline brands utilize Twitter and other social media? What are they doing wrong? Let’s discuss.

P.S: This article was inspired by my conversations with my Italian friend, Sergio Mello, of Satisfly, and my Swiss friend, Rico Wyder.

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In these trying times for the airline industry, anything that brings the employees closer together and builds authenticity in the brand is more than welcome. Emirates Airlines has recently done a fabulous job of achieving these aims. A video by Emirates employees, featuring themselves, has hit the internet recently. Entitled “Make Someone’s Day”, Emirates’ employees are singing, playing instruments from around the world and just seem to be enjoying themselves. It’s nice to see that an airline still does stuff like this that isn’t a necessity contributing towards the bottom line. And it should do good for the brand too.

I’m sure you’ll enjoy watching the video below (couldn’t find one with a better quality).

Bringing authenticity into the brand

Nothing’s more authentic about a brand than the collective voice of the people behind it. As I mentioned in my recent webinar on airline branding, involving the employees adds personality the previously faceless company. In this video, all employees are embracing the creed of making someone’s day – something very simple, and something that resonates with the masses.

Moreover, the video showcases how international the Emirates brand is. The song itself is sung in English and Hindi, and has a variety of musical styles from around the world. What better way to showcase the cosmopolitan nature of an airline which has employees from almost 100 countries!

Giving employees a stake in the game

Having employees leading the creation of this music video must have been a definite morale booster. They got to sing the Emirates’ creed, which is probably created by the employees too. And as so many of them have come together to create it, it must have brought them closer together too. And such ways of employee engagement are a necessity in these difficult times.

Happy Employees = Happy customers

Employees are the most important touchpoints of an airline brand. And when they’re exuding cheerfulness and warmth, it rubs off on the customers too. Just recall the last time you dealt with a happy airline crew – didn’t it make your day? It certainly made my day on a United Airlines flight from Boston to Chicago last year. Keeping employees happy has been a strategic decision at a number of successful airlines, including Southwest Airlines. And now, Emirates looks set to join the bandwagon.

What do you think will be the impact of this video by Emirates? Does anyone know if this was an employee initiative or pushed by HR or Marketing? Do you know examples of other airlines with similar initiatives? Let’s hear it in the comments section!

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….
Recently, Delta Airlines hired a new COO for the merged entity. He is the former CEO of Greyhound – the notorious bus service in the US with customer service horror stories abound on the internet. When I read this news, I couldn’t help but forward it to the lady who had animatedly mentioned to me that airlines are becoming “like the Greyhound of the skies”.

Airlines have often learnt the hard way that well managed public relations (PR) forms the backbone of successful airline marketing and branding. To learn more about what constitutes a successful PR strategy for airlines, and how it ties in with the overall branding approach, I met up with Samantha Lucas, Chair, U.S. Brand Marketing Practice at Burson-Marsteller, one of the world’s largest PR agencies. She shared with me some original insights on how airlines can build brands that soar above the Greyhounds of the world.

Local PR for a global airline brand

Samantha believes that “perception of airlines differs from region to region.” Hence, PR efforts should appeal to the locals, instead of trying to impress with the same message around the world. A localized PR message will focus more on local needs and cater to local tastes, hence creating greater traction. When combined with other local messages, such PR helps foster a global airline brand that resonates with the locals too.

A good example of this is Emirates Airlines. In my earlier conversation with Gary Leopold, the CEO of ISM Boston – the agency that leads the Emirates account in the US, I was told that when launching the first routes to New York, Emirates had to build trust from scratch, since it was perceived as an unknown “Middle Eastern” airline. For this, they adopted a very local approach, creating basic awareness in the City, rather than touting product features. Moreover, I’ve myself noticed that Emirates’ local messages are omnipresent from the monorails in Sydney to the football stadiums in the UK.

Consistent PR over time helps foster trust in the brand

I asked Samantha a simple question. Which are the airlines best with PR in her opinion and what are their traits. The answer: Singapore Airlines, Virgin Atlantic, JetBlue and Qantas. Their key success factor: consistently authentic PR over time.

Samantha believes that “honesty is the best policy” when it comes to PR. If something goes wrong, admitting to the mistake will only earn respect in the long term, rather than denying the facts. An example she shared with me was that even after the string safety fiasco at Qantas recently, the airline did not deny its mistakes, took immediate action and let everyone know about that. JetBlue Airways also set an example, when its CEO David Neelman posted a video apology on his blog when passengers were stuck on the tarmac for hours during a snowstorm last year.

I personally enjoyed my conversation with Samantha and found her insights to be very enriching. I’m sure you’ll enjoy the interview too – where she shares her foresights about 2009. Here is Samantha Lucas for you.

If you found this SimpliFlying article enriching, I hope you’ll pass it on to your friends and encourage them to subscribe by email or RSS for regular updates. Thanks.

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Image via Wikipedia

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Emirates Airline has placed the largest order of the largest plane in the world. They will eventually have 58 A380s – one third of the total orders Airbus has received till date. Their first A380 that flew from Dubai to New York City on Aug 1, 2008 dazzled everyone with exclusive showers in the First Class and a plush bar for Business Class, along with an overloaded in-flight entertainment system across all classes. Luxury and novelty was the name of the game. But will this last?

Three questions for Emirates

1. Once Emirates has 58 of these double-decker planes flying around the world, will they still be able to maintain such high product standards across the fleet?
2. How will service consistency be ensured?
3. How will Emirates ensure that the right expectations are set among customers for A380s with different configurations? Emirates VP for the Americas, Nigel Page, doused our curiosity with his forthcoming replies on these issues.

Three A380 configs, Two types of aircraft, Single minded focus on service

………
Nigel explained that Emirates will have two versions of the aircraft the ULR (Ultra Long Range) with 489 seats [in three classes], and an Intermediate range version with two configurations – a three class version with 507 seats and a two class version with 625 seats.

So how doest Emirates ensure service consistency on-board for planes carrying anywhere from 400 to 625 passengers? Nigel revealed that Emirates “cabin crew will be trained and licensed to operate all three versions of the aircraft.” To ensure that a consistently high standard of service is maintained, every new cabin crew will be provided with comprehensive training in Emirates’  state-of-the-art training college in Dubai. Moreover, on the ULR, Emirates will carry two cabin attendants to supervise the showers and ensure they are cleaned after each use! Now that’s some dedication.

Setting the right expectation for customers

Given that the Emirates A380 product will vary for in difference markets, Nigel clarifies that “advertising may [also] vary from one market to another dependant of the aircraft type. The configuration will be selected according to route demand. Where there is little demand for First Class we would probably operate the two class version.” The importance of implementing this aspect of the roll-out cannot be over-stated. There is nothing that upsets customers more than stepping into the aircraft only to realize that the product in reality differs drastically from the picture they had in their minds.

So, what’s the key to success? Given Emirates has shown commitment from the outset to ensure consistency of standards across their products, it’s certainly moving in the right direction. But the real test will be when the rubber hits the road (or wings reach for the skies). It’s no small feat to ensure that each passenger gets a consistent experience on a fleet as large as Emirates’. It will be the actual implementation of these plans which will be the feather in the hat, if done right.

What do you think? Can other proactive measures be taken to ensure consistency? Is it as important as we think it is? Let’s discuss.

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Gary Leopold, ISM Boston

………

According to ISM Boston‘s website, Gary Leopold, their CEO, “not only eats, sleeps and breathes travel, he knows it from the client side.” After having a conversation with him, one would appreciate the completeness of the sentence – and the man.

Not only has Gary led ISM Boston – a niche travel marketing firm – for almost 25 years, he has also been involved in the strategic planning for all accounts, one of them being Emirates Airline. ISM Boston recently won the Emirates account for North America after a review. He was gracious enough to speak to us about the unique challenges faced by airline brands and how they can succeed – both in the US and abroad.

In essence, Gary feels that airlines need to give autonomy to marketing agencies and push them to innovate – like Emirates does. Over the five years ISM Boston has had the Emirates account, they seem to have surpassed their own expectations on the quality of work produced for Emirates.

When asked whether US based airlines can ever regain their former glory, Gary believes that airlines here need to ensure consistency across product, service and the brands will become stronger. Moreover, they need listen to their customers, and come up with innovative ways (and probably new business models) to address their needs. When asked to recall an incident, Gary gets animated while describing how he doesn’t mind sitting on the tarmac on a JetBlue flight, since there is seat-back entertainment and he doesn’t need to miss his ball game. You can watch the full 20 mins video interview below.

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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

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

Japan Airlines

International First Class on Japan Airlines is a novel concept. The seat is not particularly stunning on paper – measuring a mere 26in-wide with a 79in pitch, transformable to a flat bed. The novelty, however, lies in the seat layout. Japan Airlines have arranged for a unbelievable 1-1-1 arrangement on the wide cabin of 777, which puts Singapore Airlines’ new First Class to shame. This creates a huge expanse of space for the passenger and the feeling of utter exclusiveness. Using loads of space to create privacy in turn – is an art onboard JAL. Privacy: 7/10, Space: 10/10, Novelty: 8/10

The vast expanse of space onboard JAL’s First Class

Cathay Pacific First Class

Like Japan Airlines, Cathay offers a whopping 1-1-1 seating on its 777-300ER. The seat, at 36in, is even wider than SIA’s suites. Despite the seat being much larger than JAL’s, Cathay traded privacy for the sense of spaciousness that is so artistically presented by JAL. Nevertheless it is still a show of pulling out all the stops in defining today’s luxury flying. Cathay Pacific’s first class seats also come with massage capabilities and the seat gently converts to a chaise lounge as well as a totally flat bed. Privacy: 7/10, Space: 9/10, Novelty: 7/10

Cathay Pacific First Class with massaging seats

Which are your favorite First Class products? What about US and European carriers? Would service matter more or products is supreme when it comes to First Class? What do you think? Let’s discuss…

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Given the significance of being one of the first few airlines to operate the Airbus A380, and since it will once be the 2nd largest operator of the A380, it’s a mystery why Qantas has not capitalized on this event to build its brand further. Moreover, given the recent negative press generated by the string of Qantas safety lapses, there is an urgent need to repair the damage done.

How did Qantas miss this golden opportunity?

1. Lack of radical product innovation: The four classes Qantas product for the A380 are not a radical improvement from its existing fleet of wide body planes. Moreover, the peculiar seat color choices make the cabin look dull. This, as opposed to the double-bed suites introduced by Singapore Airlines for First Class, and showers as well as a bar introduced by Emirates for First and Business Class, in their A380 planes. Both of these airlines took full advantage of these product innovations and marketed themselves well, rightly so.
2. Retracting some service features: Qantas has shelved plans to offer live internet access on its A380 planes from next month as American Airlines comes under fire from customers and flight attendants for allowing passengers to surf porn websites. Last year Qantas general manager John Borghetti was talking up the inflight entertainment system on the A380s, saying “there has never been anything like this on board a commercial aircraft”.But the lack of a full internet service will most likely disappoint many passengers who will have to make do with a limited selection of “cached internet content”. This will be a turn off for some passengers, who were probably looking forward to being connected while they cross the Pacific. Moreover, there is little official explanation given to why the service was retracted.
3. Lack of customer engagement and buzz at launch. Singapore Airlines created an eBay auction for its first A380 flight. Emirates treated an exclusive group of VIPs and media folks to a joy-ride once they landed the big bird in the US. Qantas, ironically, is keeping the event pretty low-key. In an official response from Qantas, this blog was told that, “Much of our media related activity around the delivery and entry into service will take place in Australia, with a very small contingent to be in the first flight on 20 October”. But why? Why not leverage this special event to build the brand further and engage the customers? We wonder.

What can Qantas do now to leverage on the A380 launch?

It’s probably too difficult and expensive to overhaul the product right away. So, it’s got to be marketing what they’ve got well. May be Qantas can play up the fact that they will be the 2nd largest operator of the largest commercial plane in the world. May be they can highlight their in-flight service and the new uniforms. May be, they can come up with better advertisements showcasing their A380 product features,and not just the plane from the outside.

What do you think? How can Qantas lift up their brand image with the first A380 take off in Kangaroo colors? Let’s discuss.

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Image by John Creasey via Flickr

One of my aviation junkie buddies from Singapore recently posed an intriguing question:

For airlines, does the product come first or the brand? Essentially, if an airline is losing money (as is the case with many airlines these days), does the management concentrate on revitalizing the product so that it can turn a profit in the short term, or is it better to focus on brand building, for long term sustainability?

On the surface, the answer may appear simple enough – what’s the point in thinking about long term profits, if you’re not sure of surviving another month with the current product offerings and operations?

More importantly, concentrating on just the brand without a strong product is like putting lipstick on a pig. It just doesn’t work, regardless of the quality of the lipstick. Especially so in the highly volatile, and very competitive airline industry. This concept is visible in the latest United Airlines advertisements shown during the Olympics, which show animated figures supposedly (since there it is difficult to infer) enjoying the luxury of United’s new international first class. It’s so far removed from the reality that the nickle and dimed customers probably don’t feel any connection with it. Here’s a sample of that advertisement.

If a customer feels short changed, he will never take that same airline again, unless he has no choice, and will tell his friends too – not to take that airline. The recent slash in airline product features and increase in almost every imaginable fees has left the customer feeling like a piece of cargo, especially in the US.

However, there’s always a silver lining to the cloud. There are airlines around the world that are introducing new world-class products on their planes and reaping record profits, while others sit and watch by the sidelines. How are these airlines developing new, profit-making products? What can other struggling airlines learn from those doing well?

To answer these questions, this blog will be featuring case studies this week and the next, which highlight how airlines are coming up with profit-making products, and further enhancing their brand value every step of the way.

Specifically, we’ll be studying these airlines/products:

1. JetBlue Airways – LiveTV, keeping the brand alive in a recession: 13 Aug
2. Air Canada – Productizing the airline: 22 Aug
3. Virgin – An international airline brand conglomerate: 25 Aug
4. Emirates – Size matters: 27 Aug
5. Lufthansa – How to run a legacy carrier: 29 Aug
6. Singapore Airlines – Quality matters: 3 Sep

Through these case studies, we aim to answer the question, on whether the product comes first or the brand. Products come and go, but the brand lives on. These case studies should shed some light on how airlines can create innovative and profit-making products which not only support the company, but leverage and build the brand further.

At the end of the day, products and services come and go, but it is the residual customer experience that defines the brand in the long term. It is the brand that provides these products which remains constant. The sooner the airlines realize this fact, and take it to heart, the better it is for them, and the customer.

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