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.
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.
The collapse of Malev had looked somewhat inevitable for quite sometime. The airline had been suffering from a financial crisis for the past few years: it became dependent on Govt Loans, the economy in its home market was in trouble, and its dominant position was being steadily eroded by low cost competitors. Furthermore, following an EU ruling in Jan ’12, it was ordered to repay Govt loans of over $US400million.
The formal statement from the CEO , Lorant Limburger read as follows: “Until the latter days there were prospects to continue operation and the trust of our passengers is unbroken, our partners lost their trust due to the information published in the last days and they started to ask for payment of their services in advance. This speeded up the cash outflow and the situation of the airline became untenable. It is also known that the owner, despite the best intentions, is unable to provide additional financial resources to operate after the EU decision. Considering all these the Board decided to order the cease of operation of the Hungary’s National Airline. We apologise to all of our passengers”.
The carrier had flown 329 flights to 42 destinations on a weekly basis and some carriers must have rubbed their hands with glee at the prospect of entering the market. So far, AirBerlin has announced a daily flight between Berlin and Budapest, while Aegean is launching Athens to Budapest from Mar 9th. Air France ,Germanwings , and BA have also added more frequencies on their existing routes. Lufthansa have added in more new routes too, but it is Wizz ,easyJet and Ryanair who will be the greatest beneficiaries of Malevs fall from grace.
Wizz Air already had an 12% share of available seat capacity and was already the Number 2 airline at the Budapest Liszt Ferenc Airport. It plans to base an additional two aircraft at the airport and double its weekly frequency (from 67 to 129) .
easyJet is the second largest LCC in Hungary with a 3% capacity share . easyJet already operates six routes to Budapest, three of which are to London and Paris. They are likely to expand their offering shortly.
Ryanair is set to start operations from the 17th Feb from Budapest Liszt Ference. They will start with four 737-800′s and they plan to roll out new routes on a phased basis between Feb and April. They are in final negotiations with the airport over costs, facilities and handling arrangements. The primary new routes will link up their existing bases at BCN, BGY, DUB, STN etc but they have the flexibility and the muscle to open up new routes wherever they see opportunities.
This week, both Ryanair and Wizz Air have launched a recruitment drive to capture some of the 200 Malev pilots. Ryanair is likely to prove a better option for some of the 200 ex-Malev pilots as FR fly Boeings whereas Wizz fly Airbuses.
The battle for low-cost-carrier dominance in Budapest is only beginning.
The Economist today published an article showing that 2011 was the safest year ever for flying. Statistically, there was one accident in 1.52 million flights.
According to Ascends Director of Safety Paul Hayes , “It’s the safest year ever. Airlines are getting safer – and more quickly than they’re expanding. On average, overall airline operations are now twice as safe as they were 15 years ago.”
Nonetheless, there were still 25 fatal accidents across the world resulting in the deaths of 401 people. The three largest incidents occured in the DR Congo , Iran and Russia. The DR of Congo had two crashes: on April 4th, the Air Zena Bombardier CRJ crashed on landing in Kishasa killing 28 passengers and 4 crew. On Jul 8th, the Hewa Bora Airways Boeing 727 overshot the runway in Kisangani killing 79 passengers and 4 crew.
While reducing these statistics to zero is the desire of all airlines, insurers and passengers alike, it is good to see that the trend is moving in the right direction.
Posted on November 2, 2011
United is to fly Washington-Dublin direct in 2012, using 180 seat Boeing 757 equipment. The service will be a direct challenge to US Airways. Aer Lingus currenly serves Washington through a JFK connection with jetBlue. #aerlingus #united
This week sees the release of some interesting data from the publicly listed airlines in europe: namely the traffic results from Nov. These stats show the first full month of the difficult winter season and give us some insights into how airlines are adapting to the shifting economic tides of the european market. Below is a brief summary:
November traffic stats for Ryanair show a flat LF year on year at 80% down 8pp with 4.68 million passengers. For the winter, they expect traffic to decline by about 5% .They are planning to offset the unwelcome combination of a rise in fuel and a weakness in demand by resting up to 80 aircraft.
AirFrance KLM produced relatively positive results for the month with traffic up 2.5% on a capacity increase of 1.7% and total flown passengers of 5.87million. The slight improvement in the RASK wasn’t enough to cover the rise in the fuel bill.
On the Americas network, traffic was up 6.4% and LF was strong at 84.2%. The Asian network was down .3% in traffic but still attained a LF of 82.8%. In Europe, traffic was up 3.6% but LF was down .5pp to 70.1%.
In spite of the well-known softness in consumer sentiment in its home market, Aerlingus issued a solid set of November figures: a 7% increase in Pax (year on year) , 699k Pax, and a LF of 75.4%.This LF is the highest figure recorded in at the carrier in this month since Nov 2007.
At the moment, EI is only trading marginally above its cash reserves(67c per share) at 71c, which assigns a negligible value to the on-going business. This shows how imperative it is that management fully (and speedily) addresses the pension reserve deficit of c400m.
There are media rumors in both the UK and Germany that Lufthansa may be planning to sell its stake in BMI after being threatened with a downgrade by S&P and Moody’s.
From Lufthansa’s perspective, BMI has been a thorn in its side for some time. Although it only took an 80% stake in BMI is June, the purchase was the result of an agreement a full ten years ago, when Sir Michael Bishops planned to sell shares to Lufthansa at a pre-arranged price.
Additionally, BMI has performed badly in relation to its other Lufthansa subsidiary peers:For the full year 2010, Swiss had a profit of €298 million. Germanwings lost €39million , Austrian had a loss of €66 million, and BMI posts a loss of €145 million.
So what can conservative Lufthansa do to rectify the situation? One approach for Lufthansa would be to break the airline , sell some of its Heathrow slots off separately and thus retain a controlling share in the airline.
However, sources say that Virgin are interested in the struggling airline and have already had preliminary discussions with Lufthansa . If successful, the combined Virgin/BMI airline would control 13% of slots at Heathrow. The combined airline may then be able to wield the power of BMI’s shorthaul traffic with Virgins long haul. This powerful entity would form a strong and dynamic competitor to BA’s offering.
The board of Lufthansa have plenty of options to consider but given their slow approach to move things forward, we might be waiting some time to find out what their final decision is.