Staff Reporters
Jun 29, 2010

Airlines: Offering more than value

The region's carriers are leading the sector's recovery by battling for high end travellers, but premium brands are finding it hard to stand out from their competitors.

Airlines: Offering more than value

Turbulence in the airline industry last year led to a sharp rise in short-term tactical marketing over long-term brand building.

Across Asia-Pacific, as routes were being axed and savage cost-cuts implemented, marketing budgets were largely frozen.

Matthew Semple, regional development director for ZenithOptimedia, notes that only three major airlines launched high profile branding campaigns in the region last year - Singapore Airlines, Air France and Emirates.

"For the rest, it was mainly about promotional offers with a focus on short-haul over long-haul flights," he says.

A year on, and the region is leading the global recovery in the sector. The fact that full-service airlines are sharing capacity and schedules has pushed up load factors, and, as travellers across Asia tentatively begin to shift out of the budget segment, the fight to woo premium passengers has resumed.

Cathay Pacific's latest global campaign targets business and leisure travellers and highlights the airline's dedication to providing its passengers with outstanding service.

The McCann Worldgroup-devised outdoor and print media campaign, focuses on the personalities and philosophies of individual members of Cathay staff.

"It's not so much the detailed message, more the fact that they have launched a major campaign based on service," says Ian Thubron, group president of TBWA Greater China. "It shows they are coming back with a vengeance for the premium traveller."

Semple agrees and says full-service airlines are beginning to return to the "base campaigns, the pillars that they built their businesses on" with branding focused on new routes or products and in-flight services.

Simultaneously, observers note that airline customers emerging into the post-downturn world are, more than ever, looking for greater value beyond a dollar amount.

"The downturn has made consumers smarter," says Guy Hearn, director of communications insights at Omnicom Media Group, Asia-Pacific. "They want rational under-pinning for their choice of purchase, be it airline tickets or other goods and services. This is where the premium economy category is interesting. The budget airlines expanded the customer base and now those increasingly experienced travellers want, not so much more service, but more comfort, even at a higher price."

Omnicom client Air New Zealand has ripped out business class seats on certain flights to give premium economy travellers extra leg-room. And, to stamp out any confusion over whether the carrier is a budget or a full-service airline, its staff recently stripped off for the campaign 'Our fares have nothing to hide,' hitting out at low cost carriers' hidden costs.

With regard to branding, Singapore Airlines maintains its strong profile in this year's report. However, Hearn argues that differentiation still remains one of the biggest challenges for full-service airlines.

"Take Cathay and Singapore Airlines. Yes, they care about great service and in-flight experience, but they can be hard to differentiate on a brand level. To [create distinction] requires innovation.

Singapore Airlines has recently announced new routes, but brand news is hard to create. It comes down to entertainment systems, or the way the business class seats are configured, for example."
Across Asia, the growing number of travellers booking online instead of through traditional travel agents has prompted airlines to begin to embrace social media.

"Word-of-mouth and personal recommendations are very, very powerful in the airline industry, but differentiating airlines online remains a real challenge," observes Matt Turl, the Hong Kong-based regional client services director for ZenithOptimedia.

Cathay Pacific is using micro-blogging to respond to customer questions and complaints, which is seen as a smart PR move by industry insiders. However, Thubron says: "Social media such as Twitter and other micro-blogging sites are not yet being used to full-effect by airlines. Airline travel is something people want to chat about and they usually chat online. It should be driving digital marketing in the sector."

Top 10 airlines

1 Singapore Airlines
2 Cathay Pacific
3 Thai Airways
4 Malaysia Airlines
5 Japan Airlines (JAL)
6 Qantas
7 Korean Air
8 Asiana
10 China Airlines

This article was originally published as part of the 2010 Top 1000 Brands report.

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