This is a guest post by Jonathan Haysom, who is a respected marketer and business development strategist. Currently working for Australia’s number 1 telco and number 1 company by brand value, he is responsible for maintaining and growing a multi-billion dollar product portfolio focused on next generation products. He has recently received awards for innovation in marketing and accolades for his social media campaigns and brand strategies.

———

Virgin Blue, after fighting hard as a “renegade” brand for a slice of the Australian carrier market is tipped to undergo a marketing face lift and re-invent itself as a full service brand. Some of the purported changes include the introduction of a new business class product, integrating the other brand properties (Polynesian Blue and V Australia) as well as the introduction of wide body aircraft on trunk routes between capitals.

(Image credit: ABC News)

Virgin Blue going upscale?

It is apparent from the changes the new CEO, Ex Qantas Senior exec John Borghetti is primarily going after the lucrative corporate segment of the market, one which Virgin Blue has traditionally struggled to break into due to Qantas’ having a strong and loyal customer base.

The biggest hurdle here will be to ramp up the company’s loyalty programs to make them attractive to corporate clients. The easiest way Virgin could do this besides upgrading it lounge system is to integrate with a global airline alliance, such as SkyTeam or Star Alliance, to boost its loyalty offering and expand code share operations.

It’s not going to be easy to attract new the new corporate business without impacting the most loyal customers who were attracted to the “renegade” brand. The shift away from competing head to head with other low cost carriers such as Tiger and Jet Star will surely allow it to focus more on its new customer acquisition path and deliver a more differentiated product. However it’s a delicate balance between attracting a new segment and not turning away the loyal customer base who share an affinity with the current culture and image.

Virgin Australia Airlines?

The other issue facing Virgin’s re-birth is the long-standing agreement between Virgin Atlantic Airways and significant shareholder Singapore Airlines prohibiting it from using the Virgin moniker for international flights.

I’d hasten to say the use of Virgin Australia Airlines, which was registered several years before the 2008 launch of V Australia will be the primary candidate to encompass all 3 brands.

Mr Borghetti has also recently swept the brands senior leadership team under the one reporting structure, not only implementing a few commercial side changes but also positioning Martin Daley as Product and Guest Services lead across the single carrier brand. Martin was one of the early Virgin Blue culture “creators” and will be integral to ensuring a consistent and on brand culture across all brand properties.

Finally, rationalisation of loss making routes across brands should also be on the cards as part of the marketing change out with yield being a primary focus of V Australia. A focus on greater diligence on revenue generation across the house of brands will be imperative once it becomes a branded house to ensure one branch of its network does not impact another’s profitability.

With most of the changes to come in before the end of the year, do you believe they can shake the low cost carrier moniker, bring the brands together and attract one of the most loyal market segments away from Qantas? Sounds like a big task, so let’s wish them all the best. And watch this space.

• Why a Qantas and British Airways merger is good (and why Qantas + Cathay Pacific will be even better!)
• The “Jetstar-isation” of Qantas is not over yet. Is the LCC taking over the legacy parent brand?
• Talking airline business with Virgin Atlantic VP, Paul Charles
• CEO reveals what makes SpiceJet a leading airline in India in a frank interview
• Why LiveTV is a great idea from JetBlue Airways, to help them fly through a recession and keep the brand alive

Last week, I wrote an article for CNBC, which talked about the agility of Qantas that keeps the airline in profitable territory. The article resulted in a lively debate with a number of Aussie aviation experts down under, and one of them kindly offered to write a detailed Guest Post on SimpliFlying on how it’s actually Jetstar that’s keeping Qantas afloat.

Grant McHerron (aka Falcon124) is an opinionated aviation enthusiast & co-host of Plane Crazy Down Under, Australia’s only aviation podcast. He is an online/digital project manager and perpetual student pilot who can often be found crewing hot air balloons, working airside at Avalon Airshow and plane spotting at airports around the world. He graciousouly hosted me when I visited Melbourne last year, and we almost watched the sunrise in his hot-air balloon Enjoy!

———–

The latest half-yearly results from QANTAS continue to show an airline that is hemorrhaging cash on its mainline, full service routes. While QANTAS are certainly showing signs of agility, the primary factor keeping the group afloat is the success of their Low Cost Carrier brand Jetstar.

The creation of Jetstar

Towards the end of the 1990′s, QANTAS saw the writing on the wall as customers moved towards the Low Cost Carrier (LCC) model, sacrificing as much as possible to chase cheaper airfares (yet still complaining strenuously about lack of service despite paying next to nothing, but that’s a whole different article Like other airlines they decided to create their own LCC, launching Jetstar in 2004 by rebranding the Impulse Airlines LCC operation that QANTAS had previously purchased in 2001. Re-branding Impulse Airlines was important as it allowed QANTAS to utilise their equipment and, most importantly, their staff agreements.

These agreements have allowed Jetstar to pay their crew less and utilise them more than QANTAS mainline staff who are covered by agreements that are the result of decades of union strength and bargaining. This low cost base provides Jetstar with more room to reduce fares and compete against other LCCs.

Image Courtesy of stuff.co.nz

Jetstar complementing and competing with Qantas

Low fares have not been the only factor that has allowed QANTAS’ baby to survive & grow, unlike other LCC offshoots, such as MetroJet & Song. Competing with Virgin Blue and Tiger Airways, Jetstar are also taking over unprofitable routes from the QANTAS mainline brand, including the routes run by Australian Airlines, the low cost international operation that QANTAS had launched in 2002 but eventually folded in favour of Jetstar.

In response to Tiger Airways starting a Melbourne to Sydney service in 2009, QANTAS allowed Jetstar onto the route in direct competition with their own “City Flyer” high-frequency services. The route between Melbourne & Sydney is the world’s third busiest and features high numbers of corporate travellers commuting between the cities. QANTAS reasoned that with fares falling further thanks to Tiger’s arrival, they might as well try to capture the discount travellers and keep them “in house” rather than lose them entirely.

It was this introduction of Jetstar onto one of QANTAS’ domestic cash cow routes that spurred Alan Joyce to famously state there would be “no further Jetstarisation of QANTAS.” If only that were true.

The Jetstarisation of Qantas

Jetstar’s growth has survived challenges such as the Bird Flu epidemic, Swine Flu and now the global financial meltdown. In fact, the current crises appears to have helped drive more traffic to Jetstar as business travellers and other frequent flyers have had to face reality and reduce the size of their travel budgets.

QANTAS recognised the surging “flight to value” as their First Class cabins drained down into Business Class while business travelers wound up back into Economy Class. Many passengers were lost to other airlines on some routes in the mid 2000′s, apparently fuelled by QANTAS’ lack of any Premium Economy offerings. Many of us in Australia were wondering why QANTAS was slow to realise that frequent travelers often want space & comfort, something certainly not encountered in the cramped conditions of cattle class.

QANTAS did eventually introduce a premium economy service in April 2008, slowly expanding to most of their international routes by the end of 2008. While this helped retain customers, it was becoming clear that high-end premium traffic was not only down but may, in fact, never come back to QANTAS. With high end premium traffic down and growing competition from the top quality First Class offerings at Emirates and Singapore Airlines, QANTAS have taken the wise step and are removing first class from their remaining 747-400s and 8 of their A380s (those arriving in 2012 & beyond). They will still have a First Class offering on 12 of their A380s but are reducing the number of Business Class seats on those aircraft to provide space of more Premium Economy and Economy seats.

This is yet another step along the Jetstarisation of QANTAS, even though the aircraft are still under the mainline QANTAS brand. Additional steps towards Jetstar’s dominance include their current push into Asia and their intended use of 787s to open up Europe. It is perhaps no surprise that all the new jet services & routes that QANTAS is adding (or re-opening) appear to be under the Jetstar brand, not QANTAS itself.

Qantas for Business, Jetstar for everyone else?

Over at the Plane Crazy Down Under podcast, this ongoing movement towards Jetstar has us making reference to “QANTAS, a member of the Jetstar group.” We have also joked that the ultimate end point for Jetstar will be flying JQ branded high density A380s across the Pacific and into Europe. As Ben Sandilands has pointed out in a recent Plane Talking entry, this may very well become a reality if the 787-9 does not live up to original expectations.

If current trends in domestic & international airline passenger transport continue, it is clear that Jetstar will continue to gain market share as QANTAS reduce their mainline aircraft to only those routes that still have a good market for business class. It seems likely that Alan Joyce will eventually regret his comment that the Jetstarisation has ceased as it appears to be, if anything, speeding up.

• Australia’s Qantas Airways – the world’s most agile airline brand?
• Is Premium Economy here to stay? A brand review of All Nippon Airlines
• Five clever ways to earn frequent flier miles for upgrades
• Is business-class travel going extinct? Part 1 of 2
• The business of business class

This article was first published on the CNBC blog
———-

Qantas announced today a net profit after tax of A$58 million for the first half of the financial year, down from $210 million a year earlier, although the airline did recover from a loss in the second-half of last financial year. This 72% dip in profits resulted in the shares falling by up to 7.2% in early morning trades. However, Alan Joyce, the CEO, says the carrier has done better than most of its rivals. And it has, indeed, thanks to its agility.

Agility through smart cost-cutting

Although revenues dipped by 13.4%, costs were slashed by 16.2%, which shows Qantas’ diligence and discipline in reducing expenditure in the past year. The cutting of frequencies to unpopular routes and grounding of older aircrafts was key to these cost savings.

Load-factors have been the highest in five years – at 82.4%, on flights that carried a lesser number of total passengers as compared to the past year.

This simply means that flights were more full than in the past, despite the recession. Of course, the downside was that this was achieved by offering very low fares on certain routes, which are unsustainable in the long run. Alan Joyce eluded to this fact as well, by indicating that the industry’s survival depends on higher fares.

Agility in re-configuring the cabin

Qantas was one of the first airlines to add a Premium Economy cabin to their flights. Now, they’re standing by their decision by overhauling their cabins. Qantas will be removing First Class on most of its long-haul routes, with the exception of London and Los Angeles, and adding Premium Economy to their widebody jets.

This not just reflects the growing sentiment that Premium demand will change in the coming years, but also the fact that there are more First Class seats in the market than required. For example, from Sydney to London, a passenger has the choice to fly on First Class Suites on board Singapore Airlines, Emirates, Etihad, Qatar Airways and Qantas. Certainly a case of over-capacity.

Qantas is one of the first airlines in the world to remove the First Class in a systematic fashion, and change their long-haul plane configuration to Business, Premium Economy and Economy classes. This effectively increases the number of seats and hence reduces the cost per seat even further. Such agility will pay off for Qantas in the long term.

Leveraging on Jetstar

It’s a known fact that the two brand strategy, growing Jetstar aggressively, gives Qantas Group a very valuable option that few others can match. Jetstar’s profits tripled in the past year and continue to provide Qantas a very valuable asset to leverage on low-yielding routes. The two-brand strategy has also ensured that the Qantas Group doesn’t lag behind LCC competition from Virgin Blue and Tiger Airways.

Moreover, the recent Jetstar-AirAsia cost alliance should also help the airlines reap additional benefits in the near future through by tapping on each other’s scale and synergies.

In conclusion, even though profits have dipped, Qantas remains one of the most agile airline brands in the world and it’s this quick-thinking that will keep them ahead of most competition in the coming times. What do you think? Let’s discuss in the comments, and over on Twitter (@simpliFlying)

• The “Jetstar-isation” of Qantas is not over yet. Is the LCC taking over the legacy parent brand?
• Is Premium Economy here to stay? A brand review of All Nippon Airlines
• Five clever ways to earn frequent flier miles for upgrades
• Why a Qantas and British Airways merger is good (and why Qantas + Cathay Pacific will be even better!)
• The business of business class

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 CAPA’s report on Japan Airlines vs Air Arabia to get a glimpse into what I’m talking about.

2. Legacy airline brands are not agile enough

Like an elephant trying to shake off bees attacking it, legacy airlines look clumsy trying to shake off what they call threats – low cost carriers, low premium demand, fluctuating oil prices, consumers’ reactions on social media etc. In fact, these should be looked upon as opportunties. Let’s look at airlines’ approach to social media, for example.

United Airlines is still struggling with responding to “new media” sensations like Dave Carroll’s “United Breaks Guitars”, as Southwest Airlines interacts with its fans on Facebook and JetBlue helps over a million of its customers on Twitter.

Singapore Airlines is still not on social media, just as AirAsia is making merry in its backyard. And there’s no point arguing about different market segments. I’ve flown AirAsia this summer with folks in a suit with a laptop, mostly heading to Kuala Lumpur in the morning and returning to Singapore in the evening. No wonder the 777s Singapore Airlines fly on this route are flying half-full.

A lack of agility among legacy airlines results in lost opportunities. And this is proving deadly.

3. Legacy airline brands are “stuck on stupid”

At the aviation summit in Sydney, the CEO of AirAsia X caused a bit of murmur in the audience with his opening slide entitled, “Bastardising the Low Cost Model”. You want to know why? Because most airline executives are “stuck on stupid” (a term coined by Seth Godin in Tribes). They want to carry on the practices of yester-years in today’s changed environment. And that makes them look stupid. Nothing against them personally, but why can’t airlines have multiple business models? In fact, it’s the airlines which are questioning the traditional legacy model, or even the traditional LCC model, who stand to succeed. The rest will perish.

Who to look out for?

Who’s doing it right? In my opinion, airline brands to look out for are Lufthansa (and family), Qantas & JetStar, LAN Airlines (kings of Latin America), Southwest (which continues to innovate) and AirAsiaX. Airlines that have great potential, but need to wake up and smell the coffee to lead in the future too – Singapore Airlines, Cathay Pacific, Thai Airways and Delta Airlines.

So, what do you think? Is there a future for legacy airlines? What do airlines need to do to serve the customers better, and turn a profit consistently? Let’s discuss in the comments or over on Twitter (@simpliflying)

• More good news, and Airline SEO Executives Network
• AirAsia X: a brand with a huge potential, but remember, “you’re only buying the flying”
• How can legacy airlines, airports or hotels make an entry into social media? Start from within
• Keynote presentation from Sydney: How airlines can have conversations with customers on social media
• Announcement: February will be “Indian Aviation Month”

Dear SimpliFliers,

As most of you are aware, a couple of weeks back, I delivered an expert address in Miami, Florida at the Low Cost Carriers Americas Summit, at the intersections of three topics – airline branding + social media + budget airlines. My ideas were very well received by the audience of key executives from LCCs in North America and South America. And I thought I’d share a video recording of my speech with all of you as well.

I’m keen to hear your feedback on my ideas, whether you find them feasible and how we can help airlines adopt these well. You may go through just the slides here.

Regards,
Shashank

• 5 insights on social media, which airlines must tap on – presentation from IATA Wings of Change at FIDAE
• LCC 2.0: How low cost airlines can use social media to engage their customers
• Ancillary revenues and airline branding webinar slides (with video!)
• Keynote presentation from Sydney: How airlines can have conversations with customers on social media
• Airlines 2.0: Using technology for branding through the recession – webinar slides

This is a guest post by Rob Mark from Jetwhine.com in Chicago. We’ve decided to begin a little cross-posting here at SimpliFlying and at Jetwhine.

A commercial pilot and journalist, Rob has been writing Jetwhine as the blog of “aviation buzz and bold opinion,” for two and a half years. His posts are never dull because you never need to try to figure out where he and his co-writer Scott Spangler stand on an issue. Enjoy.

————

For as long as I can remember, Southwest Airlines, now the largest U.S. domestic airline, created in the 1970s by Herb Kelleher and Rollin King, has been the low-cost airline others most want to emulate. The need to copy isn’t just about money, although Southwest has a profit history better than any other airline in the world. Most Southwest look-a-likes have, in fact, been dismal failures.

Southwest has a record of solid labor relations – despite last week’s pilot contract rejection – and a culture of customer fun in an industry that most others have never been able to duplicate. Southwest simply delivers a solid, consistent service at a fair price that keeps passengers coming back. To me, an airline that actually still responds in writing to a customer complaint says quite a bit.

The airline’s no hidden fees policy has also carried it quite a long way at a time when competitors have tried charging for everything short of breathing space. True, Southwest did appear to break with tradition last week when it announced some new fees, but charging for the work related to managing unaccompanied minors as well as pets carried in the cabin is something the average man or woman on the street will most likely never notice.

On to Ireland

When Ryanair opened for business in 1985, many analysts thought the Dublin-based carrier could evolve into a European airline modeled on the success of Southwest. Having had the opportunity to fly Ryanair a few times, I can tell you that the Southwest folks probably have very little to worry about on that front, something my first flight on the European airline confirmed. At Southwest, boarding is by group to bring some sort of order to the process of putting folks in their seats. In fact, we spoke to Southwest’s Doug Lawson about just that topic last year.

When boarding at Ryanair, they essentially open the terminal doors, aim passengers at the airplane and yell “go.” It’s every man, woman and child for themselves to find a good seat using both the front and rear doors. There was nothing even remotely funny about watching people run like crazed dogs for the Boeing while I tried to make sure they didn’t mow down my family in the process. To me, Ryanair’s business model is not so much about low cost as it is about being cheap. Even ads for the airline tout “cheap.” And when a company is cheap, consumers should beware.

In March, Ryanair CEO Michael O’Leary made news by suggesting pay toilets might be a good idea aboard his airplanes where flights are often no more than an hour per leg. In the U.S., we laughed, especially when O’Leary’s press officer confirmed that the CEO often makes this stuff up as he goes. Then last week O’Leary confirmed he’s in talks with Boeing to find a workable pay toilet solution, one that will help Ryanair remove two of the three lavs on the Boeing 737 to make room for more seats.

Making passengers pay to use a toilet is sure to become one of the largest revenue losers in the history of the airline business. But it also opens the door to a discussion about how Ryanair is fast become an airline at which the wheels have finally begun to come off the wagon. The company has clearly crossed the line between what passengers will accept and what they will not. O’Leary just doesn’t seem to realize it because he’s in business to make money, not run an airline.

I always thought no one could be less customer-focused than United Airlines. Clearly I was wrong. The only thing that really worries me is that some airline bean counter here in the states might think Ryanair is on to something. They are of course. It’s just not anything good for airline passengers. And if you do fly Ryanair in the future, you just might want to bring along a can of Lysol to kill the germs. It’s going to get messy over there.

• King of ancillary revenues, RyanAir offers €1,000 for best idea on making money!
• Hot topic: Will Ryanair charging for toilets work for its brand?
• Ancillary revenue: A boon or a bane for the airline brand?
• Ryanair’s New Fee To ‘Check In’ & The Real Cost Of Some Low Cost Carriers
• Airline Baggage Fees : The Airline Industry’s Financial Salvation?

Over the past year, I’ve had the opportunity of interviewing a number of senior airline executives. Here’s one with the CEO of SpiceJet, Sanjay Aggarwal, recorded in Dec 2008, which left me mesmerized by the man’s wisdom, simplicity and frankness. These are qualities difficult to find in an airline CEO these days – and he puts them to good use too – running one of India’s most successful airlines.

Making SpiceJet one of India’s best airlines

In his interview, Sanjay reveals a number of gems that have made SpiceJet so successful. His clarity of thought is evident in this sentence:

“We want to focus on what we do well, and we will do it better than anyone else out there – which is to provide a quality, safe, clean and reliable transportation.”

Lessons from Marriott

Having worked at Marriott, Sanjay sums up its philosophy as to take care if its people, and ultimately they’ll keep the customer happy. And with 150,000 employees, they still maintain their culture. And this is the culture Sanjay is trying to re-create at SpiceJet, by “finding the right people and motivating them to deliver an unmatched in-flight experience”.

I’ll let you enjoy the succint interview. Please feel free to share your thoughts in the comments.

• What makes Indigo Airlines one of the best budget carriers in India?
• Building the “spiciest” airline brand in India: Interview with SpiceJet COO
• Building a strong Indigo Airlines brand, and outlook for 2009
• To get to the wallet, go through the heart – Lessons in brand execution from SpiceJet
• Announcement: February will be “Indian Aviation Month”

What does the future full service airline model look like?

Which airline is closest to the future? Southwest.

What do you think? What does the future of full-service airlines look like to you? Do you think Southwest is a good indication of the future or are there better examples too?

• Why LiveTV is a great idea from JetBlue Airways, to help them fly through a recession and keep the brand alive
• Is business-class travel going extinct? Part 1 of 2
• Five reasons why budget airlines in Asia are successful
• AirAsia X: a brand with a huge potential, but remember, “you’re only buying the flying”
• Why the Southwest and WestJet alliance is good for both the brands

Continuing with the ancillary revenues special this March, I’d like to explore the issue whether ancillary revenues are good for the airline brand, or detrimental. We all know they’re good for the balance sheet, but what about the brand? To answer this question, let me segment ancillary revenues in two bands – charging for value addition, and un-bundling current product and services.

Charging the passenger for value-addition

A comment on the hotly debated article I wrote on RyanAir’s competition for charging passengers got me thinking. Here’s what Shyrose had to say:

“RyanAir should link up with the local taxi companies of the detination airports and agree a deal with them, whereby flyers can book their taxi on the plane so it’s ready and waiting for them the other side. Taxi companies give Ryannair a referral fee, and Ryanair will be positioned as offering greater value service for customers.”

And I think Shyrose is bang-on-target. Customers don’t mind paying for additional services they value. And this is especially true when the offer is in-sync with the brand expectation. There are ample examples of such value addition. Travel insurance and car rental are popular ones. The intelligent seating system I talked about in an earlier article is another. Singapore Airlines has “boarding pass privelages” for its flyers, where they get discounts at restaurants in major cities by presenting their boarding pass. And the airline probably gets a commission from the restaurant for this.

Such tactics are great for the legacy airline, since they’re anyway charging a higher fare for value-added service on-board, and the target customer would be the right one for such an offering.

Un-bundling the product and service

People mention RyanAir and easyJet as champions when it comes to earning ancillary revenues by charging the customer for everything other than the seat – 16% of easyJet’s revenues are from ancillary sources. But another airline that has done a good job with un-bundling the product is Air Canada. You can choose the fare based on your preference of the level of in-flight amenities.

Where this approach gets ugly is when airlines start charging for everything from a cup of water (US Airways) to even the loo (RyanAir?)! And this is where the whole resonance with the brand becomes important.

How far can the brand be stretched?

Everyone knows that RyanAir is a low-cost airline and you’re only paying for the seat. You can look at a simple chart of all additional fees on their website. RyanAir is very, very transparent about what you have to pay for, and what’s included in the fare. And this transparency only strenghtens the brand promise further – that of the cheapest seat.

Unfortunately, this is a something even legacy airlines are doing, but without the transparency. For example, information on additional charges is spread all over the American Airlines website, and you’re bound to learn of an additional charge at the counter. This creates a lot of confusion in the travelers mind and erodes brand loyalty.

Here’s a simple model I feel airlines should follow: legacy carriers should largely go for providing value-added services and then charging for them, and budget carriers should mostly un-bundle their offerings so that passengers can get some additional comforts, other than the seat. Of course, they should learn from each other. But at the same time, should avoid doing something absolutely detrimental to the brand. Need an example? Singapore Airlines charging $100 for a round-trip flight for choosing an emergency-exit row seat! I know for a fact that this move has annoyed even the most loyal customers!

What do you think? How can airlines earn ancillary revenues without resulting in a conflict with the brand? Does the solution I proposed make sense? Any examples of airlines doing this well?

Related articles by Zemanta

• King of ancillary revenues, RyanAir offers €1,000 for best idea on making money! (simpliflying.com)

• King of ancillary revenues, RyanAir offers €1,000 for best idea on making money!
• Low cost airline brands get creative with ancillary revenues – lounges, shops and cargo!
• Ancillary revenues and airline branding webinar slides (with video!)
• Hot topic: Will Ryanair charging for toilets work for its brand?
• Ancillary revenues and airline branding Special in March at SimpliFlying

.

Source: RyanAir

It seems like RyanAir folks read SimpliFlying! Just when we’re having an ancillary revenues special this month, they’re giving us all the fodder to write about!

The airline has launched a competition where anyone in Europe can suggest ideas by email to competition@ryanair.com on how RyanAir can make more money off their customers! The best idea wins €1,000.

Some of the wackiest ideas are already stated on RyanAir’s website:

• Charging for toilet paper – with O’Leary’s face on it,
• Charging €2.50 to read the safety cards,
• Charging €1 to use oxygen masks,
• Charging €25 to use the emergency exit,
• Charging €50 for bikini clad Cabin Crew.
  

An airline which laughs at itself

These days, companies, especially large, international ones that dare to laugh at themselves are a rarity. And an airline that can do that earns my respect. Others in those ranks? I’d say Southwest, JetBlue, Virgin America, Kulula.com, Indigo and AirAsia. Ironically, no legacy carriers made to this list. Do you know of any more?

A “cheap”, but authentic brand

Alright, many of you woul classify this RyanAir move as “cheap”. But isn’t RyanAir a cheap airline for the cheap traveler? Then, I’m sure the competition resonates well with its target market!

The true measure of how distinct a brand positioning is not just the number of fans, but also the number of detractors. Brands that try to be everything to everyone often fall flat! And through this competition, RyanAir has only further strengthened its positioning as the “cheapest” airline in Europe and done so very authentically too – by being very open about the fact.

What do you think? Good move by RyanAir or a PR disaster? How can legacy carriers be so open with their customers? Let’s hear it…

• Hot topic: Will Ryanair charging for toilets work for its brand?
• Ancillary revenue: A boon or a bane for the airline brand?
• Building the “spiciest” airline brand in India: Interview with SpiceJet COO
• The Southwest Effect in Ireland? Does the RyanAir brand come close?
• What can Tony Fernandes of AirAsia teach US airline executives? Servant leadership.