Live Issue... National carriers run into turbulence

When a plane arrives at its destination with a gaping hole in its side, people tend to notice. The airline in question, Qantas, and its infamous 14 August flight to Singapore, was soon barraged by criticism. The response from Australia’s federal transport minister Anthony Albanese was to urge his countrymen not to “talk down” their airline.

What Albanese was doing was attempting to use Qantas’ status as national carrier to insulate its brand from damage. The question for Qantas and similar airlines across Asia is whether national carrier status can be a benefit amid the dangerous downturn the industry now faces? The International Air Transport Association expects airlines to lose US$5.2 billion this year due to high oil prices and growing competition.

The link between nation and airline is a curious one - national carriers are far more linked to perceptions of their home country than brands in other sectors. And the usefulness of the association varies wildly between countries. An airline such as Air China can rely on the huge goodwill it enjoys within China; airlines from smaller nations need to leverage their nation’s reputation overseas. Singapore Airlines is perhaps the best example of an airline drawing strength from its national carrier status. “To all intents and purposes, Singapore Airlines is the United Nations representative for Singapore,” says Robert Campbell, managing partner at branding agency M&C Saatchi/Sunshine, though he adds this is not always a benefit. “National carriers can benefit from the tone or morale of a country. But they can also be undermined as well.”

Singapore gives its namesake airline a lot. Small and compact, for both business and tourism it is an advanced, yet exotic destination.

Yet for Andrew Herdman, director general, Association of Asia Pacific Airlines, says it is no longer enough for national carriers to play the patriotism card.

“The big trend is that national airlines want to appeal to a much wider range of audiences than just their country’s nationals,” he says. “Japan Airlines and Qantas realise they sell tickets in Germany and the Middle East. They are changing their advertising and the foods served onboard. They don’t want to stereotype their airline.”

To Fritz Demopoulos, CEO of travel website Qunar.com, the value of national carrier status can be summed up with a simple question - would the average consumer be willing to pay US$100 more for a ticket.

“If the choice is between, say, American Airlines and United, then the answer is ‘no’ because they are equally bad. But if the selection includes Singapore Airlines, the answer might be ‘yes’.”

The key for national carriers now is to ally the respectability of being a national airline with service. Herdman sees basically two business models for the future, regardless of national carrier status - full-service and no frills. Full-service airlines tend to be long-haul with several types of service. No frills are short-haul with one class.

So while national carrier status may insulate an airline’s domestic market, survival in the current climate will require more. “National carriers that focus on outstanding customer service and brand development will have a bright future,” says Demopoulos. “Those that overly rely upon their position as ‘national’ and ignore the consumer, will be eaten alive.”

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