Recent air accidents in Nepal, Indonesia, Columbia and Pakistan

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Last year ,  we reported that there was a  lower than average number of air accidents. Unfortunately in the past few weeks, there have been a number of plane and helicopter crashes in Nepal, Indonesia, Columbia and Pakistan which have reversed this trend. Below is a short synopsis of the most recent air-accidents.

May 14th : Agni Air in Nepal crashed when it hit a mountain while turning around to land

The Dornier aircraft belonging to the Agni Air . It crashed when it hit a mountain while turning around to land at Jomsom airport.

“Eleven Indian nationals, two Danish nationals and two Nepalese crew member were killed in the crash,” the official said, adding rescuers have so far recovered nine bodies from the wreckage.

According to TV reports, eight passengers, including two children, two foreigners and an air hostess, have been rescued alive.  The survivors in critical condition were flown by helicopter to the nearby city of Pokhara for treatment, said Laxmi Raj Sharma, chief government administrator in the area.

http://www.firstpost.com/world/nepal-plane-crash-11-indians-among-14-killed-308093.html

May 9th: Sokhoi (Russian Aircraft) in Indonesia crashed into a volcano half way into its demonstration flight

The crash of a new, Russian-made jetliner into a jagged Indonesian volcano during a flight to impress potential buyers has thrown doubt on dozens of plane sales just as Moscow seeks a comeback in foreign markets. All 45 people aboard were feared dead.

Search and rescue teams climbed through the difficult terrain for nearly 20 hours to reach the site where the plane roared in to the mountain at nearly 480 mph (800 kph) Wednesday, exploding and raining debris down a nearly vertical slope.

The Sukhoi Superjet-100 – Russia’s first new model of passenger jet since the fall of the Soviet Union two decades ago – was supposed to kick-start the nation’s efforts to modernize its fleet and resurrect its neglected aerospace industry.

http://www.huffingtonpost.com/2012/05/09/indonesia-airplane-crash_n_1505251.html

April 30th : A Fuerza Aerea Columbiana helicopter crashed between Barranquilla and Caucasia killing all 13 on board

The Bell 212 helicopter operated by the Columbian Air Force crashed with 6 Police and 7 members of the FAC.

The deputy commander of the air combat command of the FAC, Colonel Henry Quintero, said there are no survivors from the accident helicopter bell 212 in Sabanagrande, Atlantic.

“They were 7 members of the FAC and 6 of the Judicial Police on a flight between Barranquilla and Caucasia . There are no survivors, “the official said. He added that they “started an investigation into the crash of the ship that had taken off minutes earlier from the Cacom 3, based in Malambo Atlantic.” Through a statement, the FAC noted that “The Air Force moved an inspection at the scene, in order to advance the investigations and determine the causes of the accident.”

http://www.rcnradio.com/noticias/editor/13-muertos-por-accidente-de-helicoptero-de-la-152014#ixzz1upl7Tiyd

 

April 20th: A Bhoja B737 crashed into farmland on its final approach into Benazir Bhutto International airport in Islamabad killing all 127 on board

The airliner was brought down in bad weather near Islamabad with 127 on board. Saifur Rehman, from a police rescue team, told a TV company: “Fire erupted after the crash. The wreckage is on fire, the plane is completely destroyed.”

There was said to be heavy rainstorms in the areas at the time flight BHO-213 went down.Navy captain Arshad Mahmood, who lives near the crash site, said: “It was really bad weather for a flight.”The pilot was forced to move down to avoid clouds that were generating the lightening and thunder.”

http://www.thesun.co.uk/sol/homepage/news/4269693/Plane-crash-in-Pakistan-dozens-feared-dead.html

 

 

 

 

Some of the best airline ads

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In the rush to gain a competitive advantage in a deep recession,  airlines have continued to invest in expensive tv ads to highlights their brands’ unique selling points . It is interesting to note that unlike the socially media driven or email campaigns there is absolutely no mention of destinations.Or price.

British Airways – To Fly . To Serve campaign highlights its long tradition as a British carrier.

Spanair gives passengers on a flight a tailored Christmas present.

Air New Zealand show their take on safety.

Easyjet promote the trendiness of their brand.

Ancillary Revenues:The only way is up

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For a long time , traditional airlines winced at the notion of ancillary revenue streams and their potential to ‘dilute the brand’. It was only a few short years ago that the labor unions at United baulked at the idea of charging passengers for drinks. “It’s degrading to our profession. We are safety professionals, not grocery story clerks.” However, as the ill winds of falling consumer sentiment and ever-increasing fuel prices eroded their profitability , airlines scrambled to find new ways of extracting more pennies from their passengers. It is no longer a question of whether legacy carriers will simply charge for baggage, but how far they will go in charging for every services and products that is not flying you to your destination.

There are generally thought to be three streams of ancillary revenues
 Traditional Commission- based Cross-selling – ie hotels, car hire, travel insurance etc.
 A La Carte- ie baggage , holding seats, flight change fees, sporting equipment, SMS confirmations, reserved seating, lounge access, seat selection.
 Frequent Flier activity.

Of these, the biggest growth are has been in the ‘A la Carte’ stream. Every LCC airline in the world has climbed on this bandwagon, albeit some with more success than others. The greatest winner, according to a 2010 survey by Amadeus has been Allegiant airways, who manage to extract an impressive €24.89 per passenger.

Rank Ancillary revenue per passenger (Euro) Airline
1.Allegiant €24.89
2. Jet2.com €22.51
3.Spirit Airlines €22.35
4.Qantas €20.37
5. United Airlines €18.76
6. Air Canada €17.23
7. Aer Lingus €16.72
8. Alaska Airlines €16.47
9. American Airlines €14.43
10. EasyJet €14.43

Allegiant
Allegiant was founded in 1997 under the name WestJet Express. Along with Southwest, the airline was the only major United States airline to make a profit in the first quarter of the oil-driven 2008 recession. Allegiant’s routes are primarily leisure traffic,ancillary-driven strategy has allowed the company to remain profitable every quarter since 2003.

Basic Model

 Focus on Ancillaries
 Small cities, Secondary airports Warm-Weather Leisure Routes
 Warm-Weather Leisure Routes
 Low Operating Costs

While their model is simple, their ancillaries are relatively complex. They have five versions of ‘Change Fees’ and their list of baggage charges varies by route and by number of bags. For passengers it must be bewildering, but for the airline it seems to be one of their key success factors.

Other airlines are simply trying to keep up, often with mixed results.
Vueling -Seat Reservations vary between €3-30.
Air Berlin – Meal Selection  from well-known German restaurant.
Ryanair -Charging for electronic cigarettes fo €6. “Smokers favourite airline”
AmericanAirlines- Wifi on-board
JetBlue – Charging for pillows

The way forward

 Offer something that people want and are willing to pay for it.
 Know your customer.
 Sell it at the time of booking.
 Find things that are mutually beneficial.
 Consider bundling Ancillaries to get higher take-up.

References
http://www.airsavings.net/whitepapers/AIRSAVINGS%20AR%20Survey%20Results%20Whitepaper%20120710%20FINAL.pdf
http://www.tnooz.com/2010/07/22/data/study-winners-in-airline-ancillary-revenue
http://www.allegiantair.com/aaFeesForOurServices.php
http://en.wikipedia.org/wiki/Allegiant_Air

Revenue Management Training – why now is the right time to invest

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So far this year,  five European airlines have fallen (Malev, Spanair, Cirrus, air Alps, Czech connect). Oil prices are once again reaching levels above $125 a barrel ,  and the economic outlook in Europe is distinctly gloomy.

While airlines can’t do much about European macro-economics , it can do some simple things to improve its competitive position and the utilisation of its systems.  One thing they can target is ensuring that they are getting as much out of their RM(Revenue Management) systems as possible.

Over the past number of years, airlines have become dependent on RM software providers for RM training.  While this allows staff to understand how the system works and what the potential of the system is, vendors  don’t necessarily have the time or space to tailor the tools to the commercial needs of  organisations on an ongoing basis.

A 2009 survey submitted for the Journal of Revenue and Pricing showed that many airlines are not fully satisfied with vendor training . The response to the survey showed that the average satisfaction was 3.31 (out of 5), though the most common level of response  was 2!  It is clear that there is a need for a new perspective on RM training that mixes the theory of RM ,with a practical commercial sensibility.

Leveraging our experience with airlines , hotels, car parks and transport companies across the world, we can assist your organisation in introducing Best Practice Revenue Management and in building a world-class team of revenue analysts. Our view is that RM needn’t be complicated but if applied correctly, can wield a very high return on investment.

Our consultants can help to :Increase the commercial awareness of analysts, increase the standardisation of performance, improve the quality and speed of decision-making, provide insights into the changes that are occurring in the competitive marketplace, improve the communication between the analysts and the executive and ultimately deliver tangible revenue improvements.

Please contact us for more information.

References:

http://www.ingentaconnect.com/content/pal/rpm/2009/00000008/00000004/art00005

http://archive.ite.journal.informs.org/Vol4No1/Phillips/

http://www.npr.org/blogs/money/2011/12/16/143765367/why-airlines-keep-going-bankrupt

Finnair and their Social Media Strategy

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Finnairs’ marketing department  undoubtedly have fun in creating their social media content.

What they have managed to achieve is to revitalise a relatively dull, dreary image of a traditional full service Legacy Carrier into something interesting, engaging and altogether modern. This has exposed them to  a whole new market, generated millions of dollars worth of free PR and put it at the leading edge of airline branding.

And how did they  succeed? 

By connecting their brand with something that their customers were interested in
By being topical
By being relevant
Having  a simple and well executed idea
Creating a sense of fun
A memorable experience
By using all available touch-points to engage with their customers

The Angry Birds Campaign

In Sep 2011,  Finnair Flight 81 from Helsinki to Singapore was adorned with special Angry Birds decals along the fuselage and engines. The crew , the airport were all branded with Angry Bird paraphenalia. Passengers were even served  angry bird cupcakes.  Passengers were invited to compete in the world’s first ever in-flight Angry Birds tournament. With the co-branding of Samsung Galaxy and Roxio, six passengers vied for the title of Angry Birds Asian Challenge Champion, with Finn,  Jani Uljas, ultimately taking the title.

The Surprise Dance Campaign

In Jan 2012, on flight AY201 to New Delhi,  its crew did a  ’Surprise Bollywood Dance’ on India Republic Day.  It recognised India’s sense of identity, its love of dance, its hospitality and that ordinary Indians appreciate  foreigners enjoyment of its culture.

So far, the youtube video has attracted more than 4 million views.

References

http://blogs.finnair.com/2012/01/26/take-off-to-bollywood/

http://arunrajagopal.com/2012/01/31/finnairsocialmediacontentstrateg/

http://aeroblogger.com/2012/01/26/india-republic-day-dance-finnair/

http://www.nycaviation.com/2011/09/angry-birds-take-over-finnair-flight/

http://marketingshylock.blogspot.com/2012/01/surprise-dance-on-finnair-flight-to.html