September 16, 2008

Airlines Adopt Brace Position

By Abbott, Richard

Leader It is a fascinating time to work in airline marketing, as rival brands jockey for the strongest position in which to ride out an era of declining passenger numbers and soaring fuel prices.

Just weeks after the Terminal 5 debacle had finally disappeared from the front pages, finance directors in the aviation industry were issuing a tranche of depressing figures, which were seized on by analysts and commentators as the latest evidence of a market in trouble.

The accepted wisdom is that only the strongest will survive, and smaller players will find it impossibly hard to make their routes profitable. Casualties are expected to be high.

Clever marketing has never been more vital, and the diverse tactics currently being deployed make compelling viewing as the industry prepares for its biggest land-grab in several years.

Ryanair has gone on the offensive, introducing a Pounds 1-a-seat offer to force its smaller rivals into submission by means of sheer muscle. Slashing its marketing team made the airline no friends (as if it cared), but the Irish brand's confidence in its positioning is such that it has never been one for doing anything by halves.

Meanwhile, British Airways - another carrier expected to weather the current storm due to its size and extensive network - is continually on the defensive, trying to convince people that it can actually arrange a flight that both takes off and lands on time, complete with the bags belonging to the relevant set of passengers.

In a downturn, consumers return to the brands they trust, and the damage that recent events have done to BA is cause for concern. The moment it launched a fightback ad campaign highlighting the punctuality of T5 flights, it was slapped back down for muddling the figures.

It is time for the industry to grit its teeth. Strong coffee and stronger nerve are required in marketing meetings, as rival airlines attempt to outfox both one another and the market's horrible decline.

This week, we report on the ongoing battle between BA and Virgin Atlantic, as the latter prepares a Pounds 3m campaign undermining the former's proposed transatlantic tie-up with American Airlines, which Virgin argues would give the two airlines an unfair stranglehold on flights between Heathrow and the US.

The market's present turmoil makes this move all the more interesting, and the extra publicity will do Virgin Atlantic no harm, but rather reinforce its position as a challenger brand taking on the establishment.

Over the next few months, airlines and their agency partners will undoubtedly meet more regularly. Brands will need to play to their strengths and devise innovative ways of encouraging people to keep flying. A clever bit of blue-sky thinking could go a long way.

In a downturn, consumers return to the brands they trust, and the damage recently done to BA is cause for concern

Richard Abbott, deputy editor

Copyright Haymarket Business Publications Ltd. Aug 13, 2008

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