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)

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I’ve always found Thai Airways’ new brand image to be very appealing – purple, gold, and very traditional shapes. But I never really knew what it meant and stood for. So I decided to do some digging around, and here’s what I found. This description is by an Airliners.net member, Mathias Krewedl

The ornament consists of three main things: Firstly, it contains a magnolia blossom (indicated with the pink part), secondly we can find a stylised version of the typical Thai salutation “Wai”, if you rotate the logo 90 degrees in a clock-wise direction (only in this picture though) and as a third it represents the characteristically pitched roofs. And all that put into one with the colors of gold, standing for the temples, the purple representing the tropical orchids as well as the Thai silk’s glamor – a true piece of art!

Hope it douses the curiosity of other Thai Airways fans. Which are some of your favorite liveries? What do you think they stand for? Let’s hear it in the comments section…

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Another ranking, another familiar (and not so familiar) story. This time, Travel+Leisure ranking of World’s Best international airlines ranks Singapore Airlines at the top, followed by Emirates – which climbed a notch, and Thai Airways as the third, which climbed two notches. The surprise entries in the top few airlines here are SilkAir – Singapore Airline’s regional wing – and Air Tahiti Nui. It’s surely a proud moment for those at Singapore Airlines and SilkAir to have both the airlines among the world’s best. Air Tahiti Nui is in the Top 10 for the first time, so quite an achievement for them as well.

All rankings like these tend to bring out certain unique nuances about the airline industry. Here are some interesting observations.

1. These rankings are attained by surveying readers of the Travel+Leisure magazine, who’re serious holiday-makers. Hence, the inclusion of “holiday-destination-heavy” airlines like SilkAir and Air Tahiti Nui should be taken with a pinch of salt. Moreover, the fact that other established holiday airlines like Thomas Cook and Condor are not included in this ranking should send some signals back to their headquarters.
   
2. The fact that there is hardly any overlap between these rankings and airlines that won the Freddies – ranking of the best frequent flier programs – reflects that most of the fliers who’ve participated in this survey are not frequent fliers. So does that mean that this ranking should carry less importance than others? Probably not. It just reflects the preferences of a different segment of travelers.
3. An often overlooked factor is the regularity with which some airlines come out tops, regardless of the ranking type and year after year, like Singapore Airlines and Emirates. It says tons about their management not finching in times of crises (like now!) and keeping their promises with their customers.

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Airlines faced with a difficult economic environment and near-homogeneous products in-the-air are desperately looking for new ways to woo the customer. And what better way to do this than to show that it has a heart too. Thai AirAsia did just that recently.

AirAsia is offering assistance to facilitate the transportation of aid to cyclone-ravaged Myanmar, including sponsoring flights for aid workers and freeing up cargo space for aid materials, a Bangkok Post article mentions. Even Bangkok Airways has stepped up and offered relief flights from Thailand to Myanmar, former being the primary entry point to the military-governed nation.

AirAsia has demonstrated true personality here by showing that it cares too. This act alone gives a human face to the airline and will be remembered by customers for a long time to come. It is actions like these that makes a company, not just an airline, stand out. It reflects agility on the airline’s part as well. Especially so, if regional giants like Singapore Airlines and Thai Airways are keeping mum.

This is not the first time an airline in the region is playing a pro-active role in relief efforts. In late 2007, Japan Airlines provided from Japan free transport of relief goods and aid personnel bound for Bangladesh following the Cyclone Sidr.

Airlines need to think beyond merely allowing customers to donate excess miles to charity. It is act like these, in real times of need, which show true character and build the backbone for a strong brand. Airlines that show that they have a heart often tend to rule the hearts of the their customers as well.

Update:
May 13, 2008: Thai Airways is now offering free transport for relief goods to Myanmar…wonder if they read this blog post =p

Ponder that!

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