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Recently, the Centre for Asia-Pacific Aviation (CAPA) published a report which concluded that the “full-service airline model break down in the new-world order”.

“Worldwide, the number of passengers travelling on First or Business class tickets fell by 16.7% in Jan-2009, a further substantial fall from Dec-2008 levels, which were 13.3% down on the year.”

That means that legacy airlines, which made a majority of their money from premium passengers, are struggling, even as low-cost carriers see greater traffic from people downgrading and new people taking to the skies.
What does the future full service airline model look like?
Here’s my prediction.
It will consist of airlines charging for providing value added services, rather than those un-bundling their products. Moreover, customer service will become a key brand distinction for the full-service airline, as prices would generally be competitive and so would most of the in-flight products too. The savvy traveler of the future will not only hunt the lowest prices, but be loyal to the airline that treats him well. Lastly and most importantly, employees of the full service airline will be part of the family, and share the love with customers at every touch point too (up to 16 …

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 …

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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 …

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Ancillary revenues – money an airline makes from things other than the asirfare – have always proven to be attractive profit centers for airlines. But very often, they tend to be random, with airline executives making their decisions based on how much money the source brings to the airline, rather than anything else. Moreover, ancillary revenue streams are often garnered from outside the cabin, like having special offers on the website or charging a fee for baggage check in.

But as I mentioned in my white paper on airline branding, Brand eXperience is one of the most important factors affecting the brand perception and the time spent in the plane forms the most important part of the eXperience. According to recent research, the most important factor determining the in-flight experience is not service or in-flight entertainment, but the person you’re sitting beside! 80% of passengers feel their seat neighbor’s bahaviour influences their overall flight satisfaction. And there lies the opportunity.
Bring in Satisfly – to optimize your seating in the plane
A friend of mine, Sergio Mello, has started up a company called SATISFLY, which solves …

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On Wednesday another bid to make a success of long-haul, low-cost flying takes off from Kuala Lumpur, destination – London Stansted.

AirAsia X has been selling seats for as little as £99 each way, though after making a series of test bookings it seems a more likely one-way fare is £200. In true low-cost fashion, “you’re only buying the flying”. Checked luggage costs £12 each way for a 20kg bag, with meals a further £7 per flight (and you get a discount if you book before-hand).
But…AirAsia X is different
Did you know that to optimize aircraft utilization, AirAsia X planes will land in London at different times on different days? And though that’s out of the norm, as a passenger, I only care about my flight timings, not the next day’s flight timings. Hence, I personally quite admire this move.

Did you know that AirAsia X CEO, Azran Osman-Rani, regularly writes on the AirAsia blog, Just Plane Thoughts. And he does so …

Image via Wikipedia

For the last couple of days, I’ve been at the Aviation Outlook Middle East, as a keynote speaker (check out my presentation here). You’d expect that the hottest topic might be the recession, or the threat/opportunity for Low Cost Carriers in the Middle East (see my interview on that here). But ironically, during the panel discussions, during the networking breaks and even during cocktails, the hottest topic for discussion was Ryanair charging for the use of toilets in-flight!
Will charging for the loo work for the brand?
From the amount of buzz just one statement from Michael O’Leary has generated, it looks like the move has already worked for Ryanair. Afterall, no PR is bad PR! And the Ryanair CEO is probably one of the best when it comes to getting free PR anyway, just like Richard Branson. The two of them are icons for their respecive brands, like Steve Jobs is for Apple, and it adds an X-Factor to the brand (read more in …

In the past year, I’ve featured interviews with a number airline executives and branding experts. Here’s one with a person I feel has a very good grasp of the airline industry and is not afraid to speak his mind. In his crisp answers, Sam Sridharan, Chief Operating Officer of SpiceJet, one of India’s foremost low cost carriers, speaks of what makes SpiceJet so good, and why branding is a work in progress.

No Indian LCC has a distinct brand positioning, yet

Sam believes that since LCCs in India are only 3 years old, in the consumer’s mind, they’re all the same. Most of the LCCs are still very price driven, and have not built a distinct brand positioning yet. Full service carriers certainly have cues that come to mind, like Jet Airways signifies efficient service, and Kingfisher Airlines bring forth their flamboyant image. Air Deccan was probably the only one with a strong brand positioning – make the common man fly, but it’s now dissolved.
The SpiceJet Brand
When asked what customers feel the SpiceJet brand stands for, Sam answers, “warmth, Indian-ness, “Masti”(fun) and vibrancy.” SpiceJet …

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Asking for tips in Business Class
Recently, I met up with a senior airline executive in Bangalore, India. He shared with me a very interesting incident. While flying Business Class from London to Delhi on Air-India recently, he encountered excellent customer service by one of the stewardesses. But in Air-India, service levels are not always of a very high level, so this was an exception. She spoke to him for long, served him extra wine and then emphasized multiple times how flight attendants need to work long hours with little pay these days.

She returned before landing to again sweet-talk him into giving her a tip. He was appalled and didn’t oblige. I was initially surprised too, but thought that this might just turn out to be an interesting way to enhance the brand experience on board the aircraft.
Tipping – a norm in the hospitality industry
A tip is a small amount of money given voluntarily as a token of appreciation for a service rendered. We tip our servers as a way of thanking them for good service. We might also leave a very …