And Qatar Airways is not the only airline expanding into Africa. Gulf Air is adding flights, so are Turkish Airlines and regional giants Ethiopian and Kenya Airways. Which begs the question, if a nation doesn’t yet have a national airline, should it start one to boost tourism, or get other airlines to fly more often into its airports? I’d say starting a national airline would be self-defeating today.

Travel is growing, but not airline profits

While the growth in the number of air travelers continues to surge ahead in the developing world, due to fast growing middle-class, that doesn’t necessarily co-relate to airlines making profits too.

The last decade, 2001-2010, was a horrible one for airlines. As a group, airlines in the US lost $54.6 billion, and made money in only three of those years (2006, 2007 and 2010). The Air Transport Association has numbers going back to 1947. In the 64 years from 1947 through 2010, the industry has been profitable in 45 of those years. However, the profits in those 45 years, $63 billion, is more than offset by the losses in the other 19 years, $97 billion). That means the industry since 1947 has cumulatively lost about $34 billion.

This trend accentuates further when we look at national airlines.

National airlines are bottomless pits for taxpayers’ money

While some of the private budget carriers somehow make a profit through innovative marketing and product offerings, majority-government owned airlines are almost always complete basket-cases. Look at Air-India. It loses so much money that it’s enough to feed 400mn Indians for a year. If we analyze Alitalia, it’s no  mystery the airline is still flying only because of multiple bailouts by the government. Air Canada is not only loss-making, but the Canadian government is too scared of allowing competition in, as jobs are at stake. Or at least that’s the thinking.

So why is having a national airline still in fashion in government corridors?  Because it is “the mother of all cash-cows — milked by the political and bureaucratic class she is now being forced to give their life blood since she has already been sucked dry”, as Devesh Agarwal from Bangalore Aviation puts it, referring to Air India.

And that’s possibly the only reason why unprofitable national airlines still fly – to serve as private jets for the political class and their cronies. Which is why I was shocked when I read an article in the Daily Monitor in Uganda advocating that a national airline should start a national airline to boost tourism.

Does Uganda need a national airline? Nope.

For those who’re unaware, Uganda is known as the “Pearl of Africa” for its scenic beauty, temperate climate and flora and fauna. Certainly lots to do for a tourist. But that doesn’t justify setting up an airline.

The article, written by a former employee of the now-defunct East African Airways, advocates that a national airline is needed to boost tourism. Unfortunately, that was the case in the 60s, not today. Ryanair carrier more passengers to and from Britain than British Airways. AirAsia has more planes on order than Malaysia Airlines and Singapore Airlines combined. Even in Africa, non-national airlines like Mango and Kulula carry more passengers than the likes of South African Airways. Moreover, the capacity added by other airlines from the Gulf and Europe cannot be ignored.

So in order to boost tourism, a conducive environment for airlines to operate out of should be created. In fact, Uganda is very well located in the center of Africa, to act as a natural hub for airlines flying small regional aircraft across the country. Perhaps, the money should be spent upgrading the airport, which is decades old, like the Rwandan government is doing. And airlines already flying to the country should be empowered to spread the word about the tourism potential, as if they were the national carriers.

Listen to Warren Buffet

Warren Buffett, who put some money into US Airways back in the 1990s, wrote in his 2008 letter to Berkshire Hathaway shareholders: “The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money. Think airlines. Here a durable competitive advantage has proven elusive ever since the days of the Wright Brothers. Indeed, if a farsighted capitalist had been present at Kitty Hawk, he would have done his successors a huge favor by shooting Orville down.”

A national airline can only promise to provide direct employment, but in no time has the likelihood of turning into a government stooge, and burn up taxpayers’ money.

Hence, if a country doesn’t have a national airline, precious resources should be spent in boosting tourism by bringing other airlines to the country, not plundering money into a new source of national pride.

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I had the great opportunity to interview Nico Bezuidenhout, the CEO of South Africa’s Mango Airlines who faced the exact challenge described above, at Aviation Outlook Africa Summit in Johannesburg. I have highlighted different topics we discussed below, with the full video interview available at the end of this post.

Starting up is only half the battle…

Mango was launched in 2006 with a very specific task: expand South Africa’s aviation market. In what was already a relatively small market to begin with, Mango was diving into direct competition with both an established legacy (South African Airways) and low-cost carrier (Kulula) that seemed to have both ends of the market covered. So Mango built a cost structure that made air travel accessible to South Africans to whom it was previously just a dream, and therefore was able to elbow its way into the crowded market.

But creating the airline and flying the planes is only half the battle. How did Mango sell enough seats to become successful, considering the majority of those potential first-time flyers fell under that 90 percent of the population without online access?

Engaging Customers on their level

For most of the world, we know of a few ways to book air travel. If we can’t do it through an airline’s website, we know of other online booking engines we can go to. If that doesn’t work, we probably know of a local travel agent, or an airline’s local office. But would you ever consider adding an airplane ticket to your grocery list?

Because Mango knew that many of it’s desired first-time travelers were not online, they went to where these people did congregate—selling tickets through grocery stores and other retail outlets. Because only 10 percent of the South African market has a credit card (another challenge), it also developed an innovative credit scheme where it would accept credit purchases through some of these retailers. As a result, Mango was successful in doing exactly what it set out to do—make air travel accessible to people to whom it previously was not—effectively creating a new market segment.

What about social?

Despite this innovative distribution strategy, Mango has also ironically established quite a reputation for its deft use of social media—for brand recognition, to communicate special deals, and even as part of its recruitment strategy. But does this make sense when Internet access is available to so few, as pointed out earlier?

Of course it does. As Bezuidenhout points out, while only 10 percent of the population has Internet access, that also overlaps 93 percent of the current aviation market. In other words, almost everyone who can afford to fly, or does so regularly, is also part of that 10 percent of people online.

A SUCCESS STORY—HAUTE FASHION!

One of Mango’s best social accomplishments to date was the dress pictured below, which was modeled at this year’s Vodacom Durban July—a horse race that doubles up as one of the premier social and fashion events in South Africa. Created almost entirely from discarded boarding passes, the dress created a huge viral buzz for Mango, sending a message to the world that Mango is both an environmentally-conscious and fashionable airline. Through photographs that were tagged on facebook and eventually picked up by blogs, as well as the traditional media mentions that those led to, the dress generated millions of impressions for Mango.

A CULTURE BUILT FROM ENGAGEMENT

Whether through retail partner sales outlets or its innovative social media efforts, Bezuidenhout is big on relationships, and it shows. Managing an airline that succeeds on cost structure means that Mango obviously cannot offer customers some of the luxuries that legacy carriers do. However, Bezuidenhout and his staff go to great lengths to differentiate by engaging its customer base, being responsive and truly listening to understand what makes Mango customers happy.

See my full interview with Bezuidenhout below! It’s a little quiet, so turn up the speakers and listen carefully …

Click here to view the embedded video.

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Wait….let me rephrase that. Kulula.com – THE South African Airline.

And why do I say that they’re the most “fun” airline in the world? Remember their really cool airline 101 livery? Or their quirky advertisements?

But the best testimonial is that from a customer. To substantiate what I’m talking about, let me just quote the user’s story here, which is about Brand eXecution at 35,000 feet.

The highlight of any flight has to be the announcements from the crew; when landing in Port Elizabeth after a short hop from Cape Town, a booming voice came onto the PA system, saying “welcome to Zimbabwe!”, which had everyone in the cabin briefly looking a bit surprised before all bursting into laughter.

On the return hop to Cape Town, a hard bounce on the runway which turned into a go-around resulted in the first officer apologising over the PA, and asking if any of the passengers wanted to have a go instead.

And even the pre-flight safety announcement on another hop to PE whereby passengers were told that in the event of cabin depressurisation, masks would drop from the compartments above – to use the masks, let go of the passenger next to you, stop screaming and pull the mask over your face.

Now that’s what sounds like a truly fun airline to fly with isn’t it? And I think a lot of airlines around the world have been able to build in this element into their service. Remember the rapping flight attendant at Southwest Airlines? Or the in-flight safety videos of Air New Zealand? A happy traveler is a loyal traveler. At least that’s what I believe. So, why not make everyone happy?

And to re-kindle some Kulula.com memories, here are the livery photos again!

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Now here’s one plane that’s bound the become the kids’ favorite. In fact, I bet that adults would be intrigued too. I’d let the pictures do the talking, and you be the judge.

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Source: RyanAir

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 cheap traveler? Then, I’m sure the competition resonates well with its target market!

The true measure of how distinct a brand positioning is not just the number of fans, but also the number of detractors. Brands that try to be everything to everyone often fall flat! And through this competition, RyanAir has only further strengthened its positioning as the “cheapest” airline in Europe and done so very authentically too – by being very open about the fact.

What do you think? Good move by RyanAir or a PR disaster? How can legacy carriers be so open with their customers? Let’s hear it…

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In December last year, as major retailers in the US worried about “Black Friday” not arriving and cash registers not ringing, Amazon.com announced that it had its best year ever. Here’s the story and here are the numbers: Amazon reported that the buying was strongest on December 15 when they received 6.3 million orders, which according to the Dow Jones translates to a “record 72.9 items a second.” And this is not the first time Amazon has bucked the recessionary trend.

Amazon’s brand matters

The reason for Amazon’s success? It’s the Amazon brand that has done the work here. Had Amazon not established strong brand loyalty in good times, the customers wouldn’t have stood by it in bad times.  More importantly, everything about Amazon is based around customer experience, and everything is marketed to the customer well.

So what can airlines learn from the Amazon brand, to beat the recession? Here are three key lessons.

1. Build a distinct airline brand

If Amazon hadn’t established its brand as the first (and often last) stop for online shopping  —i.e., as the place to go for a huge segment of the online shopping population because of its value and consistency of shopping experience, it wouldn’t have reported rising sales when the overall online retail sales declined 2.3%. The key to it’s success? Distinctiveness.

Distinctiveness, or positioning as introduced by Reis & Reis, is what distinguishes a brand from another. For airlines these days, it’s something of supreme importance,  which cannot be ignored as flying becomes more of a commodity. Distinctiveness adds personality to a brand that resonates with its customer. Legacy carriers with a distinct brands? Singapore Airlines, Virgin Atantic and Emirates. Budget carriers with distinct brands? I’d rank JetBlue Airways, Virgin America, Kulula.com in South Africa and Indigo airlines in India among the top.

2. Everything is about customer experience

As a recent article at MarketingDoctor mentioned, everything at Amazon is built around the customer experience. The article states that “They follow up with emails on almost each shopping experience.  They guarantee what they sell and closely monitor vendors who sell through them.  They personalize the experience using consumer feedback, but they don’t hard-sell or over-sell based on this feedback, since they know that the successful online shopping experience is never coercive.  Most of all, they’ve done an excellent job of staking out their brand’s territory from the beginning and then sticking to it.”

I have often emphasized that airlines are in the travel services industry, not the transport and logistics industry. And once airline executives change their mindsets to this, they will start to value customer service much more. Again, airlines that successfully take care of its customers are often the most loved. JetBlue “following” its passengers on Twitter, KLM creating an online community for its frequent fliers and Indigo follwing up each booking with a personalized message has left deep impact on the customers.

3. Marketing is integral to the business

There aren’t any accidents in marketing.  Amazon isn’t the beneficiary of luck in this downturn either.  It’s the beneficiary of its own excellent branding strategy and a business model that has marketing built into its very core.

Airlines have often outsourced marketing, or have payed less importance to it as compared to operations and network. But the best airlines have integrated marketing in their global business operations. The best example? I’d say Emirates. Their advertisements on trains in Sydney, on malls in Toronto and on stadiums in the UK exude a consistency with the in-flight experience rarely associated with airlines.

—–

What do you think? What are some other things Amazon.com has done right, that airlines can learn from? Is there anything you disagree with? Let’s hear it in the comments section.

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Not only did Mr. Obama win the US general elections last week, he was also selected as Advertising Age’s Marketer of the Year by the executives attending the Association of National Advertisers’ annual conference in Orlando last month.

For a person who has come from behind, fighting tough opponents to win the elections, success can be attributed to many things. But one that cannot be ignored is his super-efficient marketing machine, which not only helped raise a record $600 million, but also brought Barack Obama and his message to the hearts of millions. So what are some lessons airlines can learn, from Mr Obama, to build a strong and long-lasting brand?

The power of simplicity

Change. It was a message that was understood everywhere, from the boardroom, to the hinterlands. There was no confusion over the meaning of this “mantra”. Effective slogans needs to be simple and grounded in reality. Only then will they drive masses of people toward a brand.

In the airline world, a good example of an airline which has a simple message is AirAsia, the Malaysia based no-frills airline led by Tony Fernandez – who is often referred to as Malaysia’s Richard Branson. AirAsia’s slogan is “Now everyone can fly!” Isn’t it simple and straight forward? It’s a message that even a villager will identify with. Something else that has made this slogan so powerful is that it has remained the same ever since AirAsia was established. This leads to the Obama campaign’s next great strength.

Consistency = trust = loyalty

Since day one, Obama stuck to the same message – Change. In a backdrop of constantly shifting stands first by Hillary Clinton, and then by John McCain, Obama appeared to be the only one who carried his message through with conviction. This fact stood out and built trust among his followers. In consumer businesses like airlines, strong trust almost always results in loyalty.

Other than AirAsia, airlines that have stuck to their “mantra” with conviction over a long time include Singapore Airlines – “Bringing back the romance in travel” and Emirates – “Keep Discovering”. And consumers are indeed very loyal to these brands. Since 1975, another icon, BMW, has used just one slogan: “The ultimate driving machine.” It is the largest imported European car in the US for a reason. Consistent branding results in trust, which leads to loyalty.

Achieving relevance through flexibility

Obama’s campaign was not only dedicated to a simple message over a long time, it also appealed to a variety of people by being relevant to them, in their context. In the image below, you’ll see the various manifestations of Obama’s “Change” campaign – each one appealing to a different user group, even Republicans! By incorporating a little flexibility, Obama managed to create a brand that people could personally relate with. That personalization appealed to micro-groups, or “tribes” as Seth Godin would call them, resulting in his victory.

Given the global nature of the airline industry, there is even more need to resonate with the target consumers by molding the brand to fit a local context. Some airlines that do this well include KLM, which has “KLM Asia” painted on its planes going to that region and British Airways, whose flights to India have Indian flight attendants, wearing traditional Indian dresses. In fact, Lufthansa has even tied up with a master Indian chef from the Taj Hotels Group to design its cuisine for its flights to India. Such measures are bound to resonate much more with customers from specific markets, than just applying a single standard across the board.

Don’t just be better, be Different.

“Better” never works in marketing. The only thing that works in marketing is “different.” Obama did not aim to be a better “maverick” than McCain, or try to appear more “experienced” than Hillary Clinton. He stood for something distinct – change – and made it clear to his opponents.

He achieved two things by doing this. Firstly, by defining himself as something different, he forced his opponents to fight the battle on his turf. Interestingly, Hillary Clinton modified her motto to “countdown to change” towards the end of her campaign. Similarly, well differentiated airlines attract copycats – just look at how many airlines in the US want to be the next Southwest! But Southwest never says that it wants to be a United or a JetBlue even.

Secondly, and more importantly, by being different, Obama was like the piped piper who drew people towards him and they followed him wherever he went. Similarly, airlines that know what they uniquely stand for, and communicate this internally as well as internally create a die-hard fan base that remains loyal. Airlines that do this well? Kulula.com in South Africa, and Virgin Atlantic in Europe.

Lessons in marketing and branding lie all around us. The Obama brand is one many industries can learn from, and here I’ve tried applying the concepts to airlines. What else do you think airlines can learn from the Obama marketing machine? Let’s hear it in the comments section.

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Simple and sincere expectation setting can go a long way in inspiring new customers to try a new airline. Kulula.com was the first low cost carrier in South Africa, starting operations in 2001. Since the beginning, it has captured the hearts and minds of South African travelers by bringing out the authenticity of the brand and then living up to their word. Kulula means “easily” in the Zulu language and its advertisements are known for their quirky, almost slapstick-type humor, which never show an aircraft or air hostess. They focus on local flavor and humor, showcasing real people, with whom their customers can relate to.

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TV viewers and billboard gazers have been treated to images of South Africans from all walks of life dressed up like kulula.com “fans,” complete with capes and propeller beanies, ready to take to the skies. Most of these ads feature the kinds of people who are the absolute antithesis of the jet set: the mishmash of sorts one might see waiting for a bus or shopping at Walmart. Through these, most South Africans saw an honest representation of themselves, and logged on to book tickets that were substantially cheaper than those offered by the incumbent South African Airways.  Within a year, kulula.com had become the country’s biggest online retailer and still holds the position.

Kulula.com set expectations showcasing their brand personality in the earnest. Those who could relate to it felt that they were buying something that says something about them. They were being a “rebel” and “anti-establishment” by flying with Kulula.com.

This article is an excerpt case study from the airline branding white paper, If you enjoyed this article, feel free to share it with your friends. You can also get free updates by email or RSS.

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In service businesses like airlines, first impressions count. On my hour-long American Airlines flight last evening from Toronto to Boston, I was welcomed on-board by a cheerful flight attendant, Heather. She was genuinely pleasant (and not over-doing it) and extremely courteous, even though she was the only flight attendant on board the small Embraer jet. She played along when people were not paying close attention to the safety demonstration, and cracked jokes while serving beverages. A very pleasant experience – but that’s just one tenth of the job done for the airline when it comes to creating first impressions.

Creating lasting first impressions – a hundred million times

Air Canada’s Robert Milton mentions in his book that on average each passenger comes in contact with the airline ten times, every time he flies. This may be through the call center, website, at the check-in counter and of course, on-board the plane. So if an airline flies 10 million passengers per year, there would be a total of 100 million interactions on average! So how can airlines create a lasting first impression, every customer interaction? Here are three ways.

1. Exceed expectations. Before a customer interacts with an airline, he has certain expectations formed through advertisements, word-of-mouth or previous experiences. Airlines should aim to exceed them. Reduce the waiting time at the call center. Have pleasant check-in counter staff. Cater to the fliers’ needs on-board. This is not to say that each and every airline must spend millions in sprucing up service levels, but rather exceed the expectations they have set themselves. For example, budget airlines like AirAsia promise on-time performance and not in-flight luxuries. They then ensure these metrics are adhered to. Airlines like Thai Airways and Qatar Airways promise a pampered service for their business class passengers, and then deliver it. Prioritize, then execute and keep the word.
2. Stay consistent. Every time a customer interacts with an element of the airline, from the website to the stewardess, he registers the moment as a future reference point. There is no substitute for a consistently good experience across multiple interaction points. An airline cannot afford to let the customer wait for 35 mins before speaking to a call center officer, or have unfriendly staff in a frequent flier lounge operated by a partner airline while having extremely courteous flight attendants. It is not just the on-board service that a customer cares about. An unusable website can chase away customers just as much as a dirty plane. Hence, consistency is key to creating a lasting impression.
3. Be different. A pleasant surprise almost always makes for a great first impression. Virgin America’s  famous safety video surprised even the most seasoned traveler with their off-beat safety instructions. Kulula.com’s advertisements never show any planes, but rather everyday travelers and common South African folks stuck in a funny situation. Their advertisements often contain more slapstick humor than a stand up comedy show. Again, creating a very different first impression than a screen full of smiling stewardesses and jumbo jets.

At the end of the day, an airline must maximize every interaction it has with the consumers. The easiest way to do that is to create a lasting first impression.

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