Scoot will be flying ex-Singapore Airlines Boeing 777s to Australia and China initially, then expanding the fleet to 16 aircraft by 2016 and adding destinations too.

From a PR perspective, I’d say this is close to a dream launch. After all, the aim is to get the world talking about it, even if the brand is polarizing.

A polarizing brand gets [famous] people talking

Remember Rico? The furry Air New Zealand mascot? Just as many people hated him as those who loved him. The same can be said about Richard Branson’s acts when promoting the Virgin brand – you either love him or hate him.

When it comes to branding, a polarizing image not only gets people talking passionately – they take sides and defend themselves too. The result may not be the most loved brand, but certainly the most talked about brand. And that is what a new airline like Scoot needs right now – to have famous people talking about it.

Within minutes of the press conference announcing the launch, most aviation journalists were talking about Scoot, and even Tony Fernandes tweeted about it.

So if I fly Scoot, that makes me a Scooter? And with that lame joke, it's time for me to Scoot off to bed :)

October 31, 2011 11:51 pm via EchofonReplyRetweetFavorite

@ghimlay

Ghim-Lay Yeo 杨锦丽

Ladies and gentleman: Singapore Airlines has done it. LCC to be called "Scoot". But the livery is worse: http://t.co/23UZCNEA

November 1, 2011 12:41 am via Twitter for iPhoneReplyRetweetFavorite

@winglets747

Will Horton

An airline with an attitude – Scootitude!

All this chatter among people around the world instantly forms impressions and gives an airline brand a personality. And Scoot has done a good job by trademarking the word “Scootitude” – reflecting the attitude of the airline and potentially its future customers too.

“Besides difference, it conveys spontaneity, movement, informality and a touch of quirkiness—all attributes we intend this Company to be known for,” said Scoot CEO Campbell Wilson.

In today’s world, people no longer relate to faceless corporate entities that most airlines and airports are. They connect with brand personalities and the attitudes reflected by a brand. So, “Scootitude” is a step in the right direction. It will be interesting to see how this evolves and how customers play a role in building the brand.

Lots of opportunity – time to act!

I guess someone at Scoot read our previous article on what they should do differently with this airline!

They have done a good job starting with a Facebook page on Day 1. This is important because a traditional website only offers limited interaction. Whereas on a Facebook fanpage, people can interact and have a conversation not just with the brand, but among themselves too. And this is a golden opportunity for Scoot to start forming a community.

I just wish they had a Twitter account too, so as to channel all the conversation towards them, and engaging with key influencers directly. Hopefully this will come soon.

As I’ve often said in my keynotes and panels to airline executives, an airline brand is not what you say it is – it’s what they say it is. Scoot has a rare opportunity to involve the potential customers in the brand creation process of this new airline. For starters, they can look at how the best airlines in the world are crowd sourcing ideas. And then wholeheartedly embrace the customer.

The road ahead is exciting and I’m sure avgeeks like us will be watching keenly!

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For those who don’t know what I’m talking about, possibly the last major airline brand (see AdAge article) has just caught the wind about engaging customers through social media and began their new journey by first taking over a existing Facebook fanpage with over 100,000 fans, which was started by a real fan in 2006, and setting up a new Twitter account. All this happened on Sept 5, 2011 – over two years after we wrote here in May 2009, “why time is running out for the Singapore Airlines brand to get into Web 2.0″.

Better late than never. They have the advantage of learning from the mistakes of others, but at the same time need to match high expectations set by worthy competitors like AirAsia, Cathay Pacific and Qantas. So, now what?

Twelve things Singapore Airlines needs to do social media right

1. “Just because you built it doesn’t mean they will come”. You can build the best roller coaster in the world, but to have monks ride it (image above), there needs to be something in it for them. Similarly, SQ needs to offer something unique to their fans on social media – something they can’t get offline, and something every other airline on Facebook and Twitter is not offering.
2. SQ has an advantage of already having over 100,000 fans on their Facebook fan page, which has been run by a real fan till date. Now, they need to put significant resources to carry on the good job this one real fan was doing.  SQ needs to embrace their suggestions and lend a listening ear.  Fans on social media often act like women – they are not necessarily looking a solution, but for you to be a good listener.
3. They need to reply to the negative comments, and not just the positive ones. They are doing a decent job with this right now, and need to keep up the good work (see image below).
4. It will be a learning process for the airline, which has till date maintained tight control over their brand. They must now learn to co-create the brand with their fans. We have shared previously lots of case studies of how airlines crowd source.
5. It will be important for SQ to create a multi-account social media strategy – each targeted to a separate target audience. They should look to create @SIAMedia or @SQMedia to target press and journalists – especially to send out instant information in times of crises. Learn from American Airlines.
6. Frequent fliers are twice as likely to join an airline discussion on social media, than typical adults. SQ should look to start a Krisflyer Facebook page and  @Krisflyer on Twitter to cater to the needs of their frequent fliers.
7. Over 80% of tweets an airline receives are regarding customer service issues – from flight delay queries to lost baggage accounts. Providing excellent customer service will be the key to success for SQ’s social media presence. They should either look to create an integrated model team, like jetBlue, or look to outsource part of online servicing, like KLM.
8. Having grown up in Singapore, I know how organizations there love “SOPs” or “Standard Operating Procedures”. SOPs should be created for employees on how to behave on social media. A “Social media 101 chapter” can be introduced in induction training for new employees, or annual retreats to make this a regular feature.
9. SQ has a unique advantage that few other airlines have – there are more positive mentions than negative ones. They need to leverage on this fact to build brand ambassadors, and empower them to spread the message further and come to the airline’s rescue in times of crises.
10. Leverage the Singapore Girl icon on social media – She has been central to the Singapore Airline’s brand till date. And it will be crucial that the Singapore Girl comes to life on social media too. How? I’m sure we can have a day-long discussion on that
11. Singapore Airlines also needs to ensure that they do not become yet another airline on social media, but are engaging their fans in a unique manner and driving specific business goals like revenue and loyalty. For starters, use our Social Media Cheatsheet for Airline Marketers
12. Lastly, and most importantly – branding on social media is very different from building a great offline brand. You need to experiment. You need to iterate. You need to loosen up a little. Try five things. Three may work. One might work very well. Then keep repeating the process. It’s not about getting it absolutely right the first time.

As of last month, there were 191 airlines on Twitter. Of these, only 85 had actively been tweeting. And only 28 provided 80% of all tweets! Singapore Airlines has been a great offline brand. My hope is that this doesn’t become the case of too little, too late. Now, they need to make sure they don’t get lost in the crowd of 191 airlines on Twitter, and create a brand on social media that’s just as lovable.

All the best, Singapore Airlines – hope you remain a great way to fly, even on the Twitter bird  

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Yes, Singapore Airlines is no longer the most profitable airline in the world (Cathay Pacific took over that title), and yes they’re losing market share to the likes of Emirates and AirAsiaX (to a lesser extent), but to go with a business model that’s hardly proven was a surprise move for a brand that’s been risk-averse of late.

While the initial reports stated that a good amount of analysis has gone into the decision and a “largely untapped market” exists, it’s safe to say that SIA is playing catch up in a market carved out in its backyard by AirAsia X and Jetstar. While the key success factor for SIA till date has been its endearing Singapore Girl brand, that’s exactly the dilemma they need to address – whether to extend the brand to the low cost airline or not.

Will the Singapore Girl fly budget? Probably not.

One big question everyone is wondering about is whether the Singapore Girl would fly this new airline. For those who’re familiar with SIA, they know that the airline is very protective of its brand icon. And multiple questions will be raised if the same Singapore Girls walk the aisle of the new airline.

1. How to ensure that people know SIA and the new LCC are different, yet have the same flight attendants?
2. Will service failures like flight delays or cancellations be dealt in an SIA manner, or Tiger Airways manner?
3. Will SIA Economy Class passengers transferring on to the LCC be offered free meals and amenity kits?
4. What baggage allowances will people get if they are transferring from one airline to another?

Close brand association between the two airlines might prove to be too risky for both brands. Hence, it’s likely that SIA will dis-associate itself completely from the new brand. For example, when things went bad for Tiger Airways in Australia, no one boycotted SIA – the latter still holds its reputation for impeccable service. SIA’s greatest leverage will be that they’ve run a long haul airline successfully, with a very low cost base.

Learn from the competition, then fight on your own turf

While SIA’s track record is an asset, it is also a reason for concern. The airline already has a very low cost base – how would they reduce it further, if operations are to be based in Singapore? One of the reasons for the success of AirAsia X and Jetstar have been the feed from their short haul operations. Interestingly, SIA is a purely-long haul airline, hence feeding the network for this new long-haul airline would depend on SilkAir and Tiger Airways. These and other factors will require SIA to re-think its commercial strategies for the new airline, learning from the competition.

1. SIA till today only sells airline tickets on its website (trying to book a hotel will take you to an external site). Whereas on AirAsia’s RedTix website, I can even buy Justin Beiber concert tickets! So the new LCC SIA sets up must re-evaluate what businesses it gets in and how best to leverage the brand
2. SIA’s frequent flyer program, Krisflyer, also currently only allows burning or miles on SIA flights. This is in stark contrast to Qantas’ Frequent Flyer program, where I can redeem and earn miles by shopping for groceries! Krisflyer will also have to evolve, just like Jetstar has been introduced into the Qantas’ program.
3. SIA’s new long-haul LCC can expect very stiff competition from AirAsia X and Jetstar. Moreover, the competition has one year to sharpen its knifes before SIA launches the new airline. While Jetstar would want to start routes Melbourne-Singapore-Athens flights sooner, the Malaysian government has even more reasons to grant AirAsia X coveted routes like Sydney. SIA needs to run two steps ahead to out-think the competition.
4. SIA also needs to learn from mistakes made in its Tiger Airways venture – running the new airline like a Ryanair may not work, especially in long-haul. They need to ensure high customer service standards, like they have with themselves.

A golden opportunity to co-create the brand with the customers

To provide exceptional customer service, SIA will also need to understand that the customers of the new airline more like those of Tiger Airways’ than its own. And they need to deal with them in a different manner. What do I mean?

Currently, SIA has no official Facebook fanpage. No official Twitter account. Or any other new medium engagement channels. All this when AirAsia, right next door, has become the first airline outside the US to reach 1 million Facebook fans. Tiger Airways’ social media interaction isn’t something to speak of either.

SIA needs to hire manager who believe that the brand is no longer about control. Rather, it’s about influencing a certain behaviour, and engaging with customers using mediums they’re familiar with (I still have to fax in certain requests to Krisflyer!). They can no longer be in a state of educated nonchalance about these new ways of building a brand, as I had mentioned earlier.

Singapore Airlines has a rare opportunity to involve the potential customers in the brand creation process of its new low-cost long haul airline brand. For starters, they can look at how the best airlines in the world are crowd sourcing ideas. And then wholeheartedly embrace the customer.

Given their track record, I think Singapore Airlines is going to do a good enough job setting up this new airline – what remains to be seen is whether they are able to sustain profitable operations in the face of changing customer realities and fierce competition. Exciting times ahead! What do you think?

(Special thanks to Khoa Huynh and Anthony Prsakasam – my two aviation geek friends who helped seed some of the ideas in this article)

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In advertisements released this month, there are no A380s. No business class beds. No gourmet food. No lounges. But just the Singapore Girl. I bet some of you would recall that in the late 70s and 80s, this was precisely the brand strategy for Singapore Airlines – something that set it a class apart from the rest. Here’s what the new ad looks like:

Of course, we were more than curious about the latest move, and managed to get an interview with the spokesperson at SIA. And here’s the interview, verbatim.

Interview with Nicholas Ionides, VP, Public Affairs, Singapore Airlines

Q: It’s refreshing to see the Singapore Girl being the center of SIA’s brand. What led to the re-think?
A: The Singapore Girl has always been central to SIA’s branding, and she was never excluded from our ads as we recognize the strong emotional connection our customers have with our brand as a result of her iconic image.

Sure, our ads and campaigns have taken varying forms as they carry different messages over the course of time, but through it all, the Singapore Girl was always present, whether we were promoting our latest products, introducing a new aircraft or launching a new destination.

Q: The focus now seems on the Singapore Girl icon, and the destinations – what about the product?

A: As explained above, our on-going marketing campaigns would naturally take varying forms and carry different messages over the course of time. The focus of each advertising campaign is determined by the message we want to convey during that period of time.

Previously, we have had advertisements featuring our cabin products, which worked well to inform the traveling public about our new innovations. We also had destination advertisements that showcased the many locations to which we operate. Similarly, the latest Singapore Girl campaign aims to reinforce our forte – the world’s best in-flight service.

Q: Previously, SIA’s ads focused on the price and the product – are these out of the picture now? Why?
A: No, we are well aware that price and product are strong factors that influence consumer patterns. By building an ad campaign around the Singapore Girl, we are highlighting what she, and SIA have come to symbolize – our Asian hospitality and world-class service standards, epitomizing the warmth and caring that customers have come to expect of SIA.

By having the Singapore Girl front the latest campaign we hope to remind our customers and the public of these attributes that set SIA apart from others.

Q: How has the SIA brand evolved over the years, and what does this latest re-incarnation signify?
A: SIA first used the Singapore Girl to front our ad campaigns in the 1970s and this continues to today. Despite the progression of time, the essence of the Singapore Girl and what she represents remains timeless. The details and presentation may have varied slightly through the course of time, but we’ve always sought to be contemporary while holding on to our traditional values of service and the warm hospitality that is associated with Singapore Airlines.

The latest campaign is a continuation of our long-standing Singapore Girl ad campaigns, showcasing the Singapore Girl’s Asian hospitality while bringing the romance of travel to life. To present the diversity of the destinations that we serve, we filmed on location in four different locations – San Francisco,  Paris,Jaisalmer in India and Wuzhen in China. The unique character of each location comes across strongly, and each is a fitting iconic backdrop for the Singapore Girl herself.

Q: The advertisement was first released on Youtube, and the video now has over 220,000 views. Why was the decision taken to launch Youtube, given how conservative SIA has been in social media use?
A: We adopt an integrated marketing campaign approach to advertising and digital platforms play a key role in all Singapore Airlines promotional campaigns. Online activities including selected social media channels, where relevant, complement the traditional media channels used to ensure that the advertising message reaches consumers at various touchpoints.

At the same time, we recognize that people are increasingly obtaining information, furthering their interests and sharing their thoughts through new media. As such, new media platforms like YouTube are dynamic mechanisms with which to get the word out.

Q: Four making-of videos were also released on Youtube – what purpose do they serve? Will this be a regular feature of all future advertisements?
A: We have over the years, seen great interest from the general public on how our ads are put together, so we thought what better way to share “behind the scenes” moments than as an introduction to our latest ad campaign?

Platforms like YouTube are borderless in nature, in that you don’t have to be in a fixed geographical location to access an ad, and you don’t have to wait for it to come on at a certain time or day. So those who are interested to find out what we’re doing, can do so very easily, and that allows us to further bridge the gap between consumer and service provider.

Q: Some say that the ads are sexist – what’s your take on that?
A: The iconic Singapore Girl has long been a cornerstone of the Singapore Airlines brand philosophy and world-class service standards, known for her warm Asian hospitality and affable, caring ways. She represents not just the Singapore Airlines flight attendant, but service-focused qualities that our cabin crew – male and female – all possess.

In her distinctive sayong kebaya uniform, the Singapore Girl has become a global marketing icon recognised as one of the airline industry’s as well as Singapore’s most prominent figures. Together with her male counterparts, all our Singapore Airlines cabin crew members are ambassadors for the Airline and Singapore.

Q: What about the SIA Guys? On my SIA flights, male FAs have been the most attentive and friendly!
A: It won’t be a stretch to say that consistency is one of SIA’s key strengths, and a lot of that comes from the fact that customers can expect a certain standard of service and delivery whenever they fly with us. It’s not easy for airlines to be able to replicate such consistent levels of delivery across their entire cabin crew population, but at SIA we’re proud to say that we’re able to so do even with some 7000 crew, more than one third of them male. The fact that the Singapore Girl is a fixture in our ads should not be read as taking anything away from the guys, because they are also key to our success and possess the core value of world class service.

Q: Having set such high brand expectations, what do you think might be a challenge in living up to the brand image?
A: Before you can create a great brand, you have to be able to live up to the service expectations that your customers have.  The advertising of Singapore Airlines serves to remind people about the high levels of service we provide to the customers, but it wouldn’t work if we didn’t live up to those expectations in delivery. We consistently strive to meet the highest standards of customer care and service, to fulfil our promise of being “A Great Way to Fly”.

Q: What’s next for the SIA brand and the SIA Girl?

A: Customer service, product innovation and network connectivity are the key pillars that form the foundation of our competitive offering. We are committed to constantly innovating and improving our product and service offerings to provide our customers with the very best premium air travel experience. As an industry leader, we do not rest on our laurels after the introduction of new products, but move forward by continuing to seek comments and feedback from our customers to improve on our products and services to stay ahead of the game.

Our greatest asset is also our people, and we will continue to invest in our people through training, just like how we will carry on growing our brand equity to ensure that the Singapore Girl – the hallmark of Singapore Airlines’ gracious service and innovative products – remains timeless and relevant in the hearts and minds of our customers.

A sustainable brand differentiation?

As with all new brand strategies, it is debatable whether the differentiation is sustainable or not. I personally believe that the focus on the Singapore Girl is much more sustainable for Singapore Airlines. After all, while they were the first to fly the A380, Emirates now flies more. While SIA had the widest Business Class bed in the world, Turkish Airlines has it now, while Oman Air has the longest. Product differentiation is seldom sustainable.

But I believe no other airline can duplicate a Singapore Girl – it’s difficult to take away her essence. Don’t you think?

Just try imagining a subservient, almost Geisha-like stewardess on an American carrier – yeah, I know it’s difficult.

I rest my case.

What do you think of Singapore Airlines’ latest re-incarnation? Is the re-focus on the Girl a sustainable competitive advantage? Or are they going back in time? Let’s hear your thoughts, over on Twitter (@simpliflying) and in the comments section.

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I feel rating Hainan as Five Star was the final nail in the coffin for Skytrax. Here are three reasons why I believe Skytrax is dead:

1. Irrelevant – If I’m a Kobe Bryant, then the only Business Class seat that’s Five Star for me is Oman Air’s – not Asiana or any other 5-star-classified airline. Because I can fit in there. Moreover, service and products differ dramatically for airlines on different routes and sectors. Hence, airlines ratings need to be relevant – which Skytrax is not.
2. Not real-time- Annual ratings are no longer desirable as airline service levels can dramatically change over a much smaller period of time. Look at how Garuda Indonesia dramatically improved service in the last month. Moreover, passengers are now used to rating in real-time and also consume real-time data, which Skytrax doesn’t seem to support
3. Not peer-reviewed- In the same vain as real-time, passengers are used to reading peer-reviews to determine which airline to fly, not annual “star ratings”. In fact, recently, the UK government announced that they’re withdrawing support for hotel star ratings, because consumers prefer peer-reviewed ratings.

What does the Twitterati think about Skytrax?

Again, these are just my own opinions. To verify them, I conducted a poll on Twitter, and here are some reactions from those who took part, along with the chart summarizing the poll results.

As you can see from the results of the poll, 81% of the respondents believed that Skytrax ratings are highly irrelevant. I guess that sends a clear signal to airline managers obsessed with achieving an additional Star on the Skytrax ratings to look elsewhere.

What is the future of airline ratings?

Now that the writing on the wall for Skytrax is quite clear, we should think about the future. For starters, there are alternates like Eezeer’s NOW ratings for airlines, TripAdvisor’s airline reviews and even Zagat ratings, which are much more real-time and relevant than Skytrax. A recent USA today article also evaluated a variety of airline ratings.

So now that travelers have a lot of alternates to Skytrax, airlines looking to adhere to the next wave of airline ratings need to consider a few facts. And here are 10 of those.

1.     Each flier is different in what he/she wants in a “perfect” airline. It depends on various factors which themselves vary between various (yes, another various) airlines. Hence, the difficulty of quantifying what makes an airline good. It’s purely subjective.

2.     Business travelers often prefer extra space (think laptops, business suits, comfort) along with lounge access, free pickups – and they will rate the airline differently than leisure travelers. In fact, each micro-segment will have it’s own way of assessing the quality of the airline -from backpackers, to gramdmoms. Airlines need focused differentiation. Don’t try to be everything to everyone!

3.    Presence of multiple surveys is more confusing than enlightening. Doesn’t really help since the traveller looking for advice due to their different results and interpretations of what is “best”. And airlines need to help simplify this process.

4.     Comparisons in surveys are often not done in a uniform manner. LCCs cannot be included in the same class as legacy carriers (Zagat Survey) since they serve different purposes and will have different offerings.

5.   Consumers can often see through the PR spin by airlines about rankings. Proclaiming a winner might be the result of a magazine/survey’s prejudices. So, be truthful, and don’t try to cover up your misgivings.

6.    While ratings matter, price is still a key factor for deciding which airline to fly on – followed by schedule and convenience. Hence, sort out the basics of what value you’re offering to the customers, before dedicating resources to managing ratings.

7. Airlines should ultimately have route managers being held responsible for ratings of their specific route, over time and versus competition on that route. And that’s when the overall impact will be felt.

Eventually, not only is it difficult to identify the “best” airline, I think the question is pointless until a standardised method of measurement is undertaken. Otherwise, we might as well say oranges are better than apples (which might be true depending on the person.) The counterpoint of course is that some airlines are indeed oranges while others are apples. So can airlines be truly compared since they all tend to offer value through differentiation and will tend to do better than other airlines on some counts and worse on some other counts.

Until we can truly quantify such problems and even them out, the question of best is useless. We should stick to systems that compare airlines across a list of measures and let the traveler decide which airline to fly depending on how *he* views the relative importance of those measures.

And the reality is that Skytrax is a 90s technology that faces sunset this year – and unless they re-invent themselves to incorporate real-time peer-reviews, be transparent about their rating system and use social media to engage with customers – they’re doomed.

What do you think? Let’s discuss on Twitter and in comments.

P.S: Special thanks to Shubhodeep Pal for help with this article

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Image Source: Singapore Airlines

In both the flights, I felt a distinct connection with the flight crew that was serving me. I kept wondering why that was. The difference was eye contact. In Singapore Airlines, each time the Singapore Girls spoke to me, they kneeled down, looked at me at eye-level and then spoke. In Emirates, while the flight attendants didn’t kneel down, they always looked me in the eye when speaking with me or passing me something.  And coupled with a smile, it was always heartwarming. Even the smallest of interactions were a pleasure.

Quite simple isn’t it? It doesn’t cost anything to smile, and while it might take some time to kneel, it creates a lasting impression. One that often drives brand loyalty. Hence, it’s worth it.

What do you think? Why aren’t more airlines using more such gestures that hardly cost anything, to win over hearts and wallets? Let’s discuss here, and on Twitter (@simpliFlying)

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—–

The latest study from Ideaworks, sponsored by Amadeus; shows that airline ancillary revenue is on the increase, up 45% on last year to €11 billion ($13bn), and that in order to be in the top 10 ancillary revenue generators an airline must drive €300 million in ancillary sales. Airlines cannot afford to ignore the rapid development of this trend but strategies to take advantage of ancillary revenue will need to vary according to each airline’s brand positioning, and this involves careful decision-making.

Unbundling translates into cash

As can be seen from the graphic above, LCCs have moved full steam ahead with unbundling, selling exit-rows, extra legroom and priority boarding. However, the story of the last couple of years has been the entry of the U.S. majors – United and American now generate around €1.5 billion each. Even Singapore Airlines has started charging up to $100 for exit-row seating on their long haul flights.

There are compelling reasons for an unbundled market position:

1. Unbundling enables completely new revenue streams as customers select services ‘a la carte’
2. In the world of price-centric internet searching, airlines are under pressure to advertise a low base fare
3. An unbundled approach enables greater customer choice, although airlines need to ensure transparency to avoid confusing and misleading their customers.

To unbundle, or to preserve the brand?

For airlines that have built brands on premium service the decision to impose charges is a big one. Emirates, for example, is resisting the trend and even Southwest airlines has bucked the LCC tendency by not charging for baggage fees. If an airline opts for this approach, it is essential that customers are informed at every point of sale because consumers are beginning to expect baggage fees and additional charges.

What’s certain is that brand consistency is a must. If an airline’s offer is unbundled in one channel but not another, the resulting customer confusion will hurt sales and defeats the object of brand differentiation. This requires careful thought and the integration of ancillary services within the selling process, including the travel agent booking flow in order to drive adoption.

Another potential brand and revenue pitfall is delivery –it is one thing to sell a service, quite another to ensure it is delivered, on time, every time. Imagine if there is a disruption and customers are moved to a smaller plane with less exit-row seats, but the airline has already sold too many! Issues such as this require planning upfront.

Integration with an airline’s CRM and revenue management system also help to track and operate ancillary services according to customer value, whilst ensuring maximum revenue capture.

At Amadeus we are working with airlines of all shapes and sizes to deliver ancillary revenue strategies across multiple channels and in line with industry standards.

Editor’s Note: Horses for courses

While the dilemma for choosing between unbundling to drive ancillary revenues or to preserve the brand is a very real one, the best solutions would be customized to individual airline’s specific needs.

For example, while almost every airline in the US is charging a bag fee domestically, Southwest has made it a competitive advantage by not charging one. Similarly, Delta Airlines charges a bag fee for domestic sectors, but none on cross-Pacific flights. Because no other competitors do. It’s horses for courses.

So, what do you think? How far can airlines push the un-bundling argument before seriously compromising the brand, hence loyalty? Let’s hear it in the comments, or over on Twitter (@simpliflying)

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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)

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This got me thinking…the marginal cost providing an exceptional service nothing compared to that of providing a superior product in a plane. And if such a service could be offered to the masses (in Economy class) for a charge, then it might be a win-win!

What a VIP service on Economy class could be like?

Great service on-board SIA is something even other airlines talk about (Aeroflot sent their staff to be trained by SIA last year!). But not everything that’s offered on First Class can be duplicated on Economy. So, here’s a quick list of what can and cannot be done:

1. Being addressed by name, all the time – this happens even on Indian budget airlines!
2. Genuine smiles all over. Everytime I looked at the SIA Girls, it only made me feel happier – Probably the easiest thing to duplicate and the most lacking in the Economy cabin. Just
   
3. Speed through security and immigration. Singapore Airlines offers speed-passes to their First Class passengers so that they can skip the lines/queues. Easy to duplicate for passengers willing to pay for the service too
4. Limousine pick-up and drop-off. Virgin Atlantic does this for the Upper Class, so do a lot of the Middle Eastern airlines. How about charging standard fee for hassle-free drop offs? airBaltic does this in Riga, Latvia.
5. Premium check-in and porters at the airport. Wouldn’t you like to just skip all the check-in lines, especially with all the increased security? How about checking in bags at the hotel itself? Or even in the parking lot? Guests at Disney resorts can do both! And I’m sure airlines can tie up with hotels on this bit, and they both make some bucks.
6. For food, choose your own Chef – this is already being done by a couple of airlines in Economy Class, like Etihad Airways. So, why can’t the rest of the airlines provide this, at a fee?
   
7. How about an exit-first fee? We all know how irritating it is to stand in the aisle for over 15 mins trying to get out, even after the door has opened. How about charging a fee for priority exit for passengers who’re in a hurry? This is something I wish I had mentioned in my “Back to the future” video as well.

Why treating Economy Class passengers would work for an airline brand?

It’s not just the passengers who’d feel good about being pampered, but even the airlines can benefit from this. Here’s how:

1. Airlines are charging for a value-added service, not something that was meant to be included (like free checked bags!)
2. Economy Class passengers need not be treated like cattle – each one can customize his or her own experience a little
3. It’s the masses who create the most buzz – so treat them well and the airline would leverage on the Word of Mouth
4. Passengers should be able to use their miles for such VIP experiences as well – which works in the favor of the airline. Since miles required for such experiences be much lesser than that for a full flight, more people are likely to burn miles
5. LCCs can offer services only they excel in, like satay on AirAsia and fresh-baked cookies on Midwest – and competition will find it difficult to replicate
6. An ala-carte system like Air Canada’s can be created to upsell offerings while the booking is being made

These are not such outlandish ideas after all, and I say this because of something Chris Brogan wrote over a year ago:

Is there any way we can fix that “get off the plane” part of my trip? The amount of time between that bell ding and actually walking by the pilots to thank them for a non-bumpy landing seems to last forever. Isn’t there any kind of Disney people-in-line engineering that would fix this process? Tazers for slow people? At this point, I’d pay an extra 10 bucks for you to restrain people so I can just leave efficiently.

So, what do you think? Will any airlines jump on this? Would you pay to be treated like a VIP and not cattle? Let’s hear it in the comments section and over on Twitter (@simpliflying)

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• Back to the future – What would air travel be like in a year? Trip report Dec 2010

A little girl’s hand was held by an elegant SpiceJet stewardess dressed in striking maroon. As the two ladies headed towards the galley, I saw tears rolling down the little one’s cheeks. Her ears were probably hurting as we started descending into Jaipur, India. The stewardesses in the galley started playing with her and then opened up one of the carts for her too! She was given a few packets of biscuits and a SpiceJet kids’ coloring kit. The little one was soon beaming from ear-to-ear and ran back towards her parents full of joy.

You must be wondering I’m telling you this story? Not just because the kid in me got excited and requested for one (see pics below), but because such instances of brand execution are an inherent part of every successful airline’s brand strategy.

Something else that happened on my SpiceJet flight was that an elderly lady who was seated in the bulkhead row was reluctant to put on the seat belt because she was hurting around the waist as the belt was too tight. Instead of shouting orders (which often happens on US-based airlines), the stewardess calmly explained to her the importance of the safety belt, got her a belt extension and helped her securely fasten it. All the time, I sensed a dash of patience and graciousness, and not outright exertion of authority.

Now, the next time parents of that young girl fly, or the elderly lady travels alone – which airline do you think they will pick? The answer is obvious – SpiceJet.

Creating emotional bonds – a hallmark of great airline brands

A crying baby. An aching grandmother. A young dad stressed out with his one year old. All these may sound like annoyances to the typical air traveler, but these are exactly the instances where airline brands that have their act together create a long lasting emotional bond with the customer. Singapore Airlines is famous for taking special care of parents with young children, even helping them carry the child and playing with the child when needed (I’ve witnessed this a number of times myself!). And it was great to see one of the most successful airlines in India deliver service that matches the best.

Matters of the heart go a long way in building brand loyalty

When I spoke with SpiceJet’s CEO Sanjay Aggarwal last year, he emphasized that India is becoming an environment where it’s increasingly difficult to differentiate the brand. And emotional connectivity can go a long way in driving loyalty. For example, the fare on a Bangalore to Mumbai domestic flight in India differs by less than $5 for most of the carriers. In that case, if I have a special memory of being treated well by SpiceJet, or even watching someone else being attended to, I will choose them.

Customer mindsets are actually quite simple to understand. You offer + deliver great value, and the customer will happily become loyal, and recommend the brand to his friends too. In the LCC world, JetBlue, Southwest and now SpiceJet and Indigo are doing it. Among full service carriers, people happily pay a premium to fly Singapore Airlines, Virgin Atlantic and Cathay Pacific. It’s not what expectations the brand sets, but more importantly whether the brand execution exceeds the expectations – which makes a successful airline brand.

What do you think? Is it worth for airline brands to put in the extra effort to create emotional bonds? Do you have stories to share where an airline made you happy? Share it in the comments or on Twitter (@simpliflying).

Special thanks to Deepa Dey, Bijender Singh and the Mumbai Duty Manager of SpiceJet for making my flight from Mumbai-Jaipur extra Spicy!

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