The soaring cost of fuel has the airline industry facing perhaps its most challenging year ever, but only a few of the major U.S. carriers are focusing on marketing to help them ride out the turbulence.
For the most part, airlines have backed away from big, traditional advertising campaigns, focusing their efforts instead on public relations, said Henry Harteveldt, VP-principal analyst of Forrester Research's travel industry practice. “Demand is softening. People aren't sure if they can afford to take a trip,” he said. “And you don't have airlines going out there and saying, "You deserve that trip. You should fly us.' ”
Instead, Harteveldt said, airlines are sacrificing the customer experience and altering loyalty programs, citing as an example United Airlines' and US Airways' recent announcements that they will no longer award a minimum of 500 frequent-flier miles per flight to loyalty program members. “If they ran ads that said, "Hey, this is a tough environment ... but we're committed to preserving and improving your experience, I think people would be receptive to that,” he said. “It's a shame that the airlines don't have the creativity or willingness to do that.”
One notable exception is Southwest Airlines, the only major U.S. carrier that is still profitable. Southwest, which hedged fuel costs and so far has avoided some of the impact of skyrocketing oil prices, continues to grow as other carriers slash routes, frequency and jobs. The airline last month launched a campaign with the message “Fees don't fly with us.” One ad plays off Southwest's tagline with the headline, “You're now free to move about the country. And your bags are free, too.”
The campaign, which includes TV, print, radio and online, began airing within weeks of American Airlines' announcement that it would charge $15 for a first checked bag—a move soon followed with announcements of similar fees from United Airlines and US Airways.
Baggage fees are a particular sticking point with travelers and communications experts alike. Though airlines have been dealt a tough hand, said Gene Grabowski, a senior VP at Levick Strategic Communications, fees are only making the situation worse. “It's an unfortunate mistake to start nickel-and-diming travelers,” he said. “They'd be better off with a flat surcharge added to the ticket.”
Plus, while the fees may generate some revenue for airlines, they won't come close to covering the increased cost of energy, said Robert Mann, president of R.W. Mann & Co., an airline industry consultant. “They'll amount to passenger inconvenience and [bad] sentiment,” he said.
Alienating travelers with fees and a poor customer experience could also harm airlines as they seek help from Congress, Grabowski said. “The airlines need to be building allies among travelers so that when they need something on Capitol Hill, they've got advocates,” he said. “But instead, they're making enemies of travelers. So everywhere they turn for relief, they're being buffeted because they don't have a constituency.”
Twelve U.S. airlines last week attempted to gain such support from customers, sending an open letter via email that asked travelers to join the companies in pushing for legislation to control oil speculation. The letter explained how restoring and enforcing regulations that control market speculation “will help cool the over-heated oil market and permit the economy to prosper.”
On Tripso, a travel news and commentary site, visitors responded to the letter with bitterness. One reader wrote: “Airline executives have been racing each other to the bottom in reducing customer service and otherwise treating their paying customers like rotting garbage. ... And now they want us to feel sorry for them and to help them preserve their bonuses and pensions?”
Another replied: “They want my signature? Of course I am willing to do that. In exchange for an end to all fees and surcharges, normal solid pricing, in-flight food, drinks and entertainment, friendly staff and normal customer service.”
Poor customer experience has taken its toll on airlines' brands, though Robert Passikoff, president of Brand Keys, said that damage has been a long time in the making. In fact, airlines have lost so much of their brand equity over the years that many of them are now just “category placeholders,” he said.
“Everyone knows American,” he said. “But what do you know them for? You know them recently as the guys who screwed up on their safety checks and had 3,000 airplanes grounded, as the airline that led the charge with baggage charges. The negative stuff is not brand equity, it's just negative.”
The acid test, he said, is simply to ask what an airline stands for. “What does United Airlines stand for?” he asked. “If you have to stop and think for more than three seconds to find a single word to describe them, then they're a commodity.”
An airline brand is essentially the sum of the experiences that passengers have when they fly with that carrier, said Al St. Germain, global director of the airline practice at Landor Associates, a brand consulting company. The problem for many airline brands, he said, is that customers' experiences these days are very different than in years past.
“These are brands that have been around a long time, and people have fond memories of the way things used to be in this industry,” he said. “But now you have a product and experience that just doesn't live up to what it used to be. And human nature being what it is, folks get disappointed by that.”
An airline such as Southwest hasn't failed customer expectations because it's always been a no-frills airline, St. Germain said. “They never offered meals. They don't now, and no one is disappointed,” he said. “They're a testament to consistency from a brand standpoint.”
Another brand to watch through the current crisis, St. Germain said, is Continental Airlines, which has made a point of continuing to offer meals at mealtime. (The airline earlier this year debuted a humorous TV spot highlighting that fact.) The company's leadership talks about the impact various moves will have on its brand, St. Germain said. “You don't always hear that at some of the other carriers,” he added.
Perhaps more important, St. Germain said, Continental's internal communications strategy is honest and direct. He cited the way the airline handled last month's announcement that it would cut capacity and jobs.
“You cannot underestimate how important the relationship with your frontline employees is to the successful delivery of your brand,” he said.
St. Germain pointed to JetBlue as an upstart airline that is poised to be a successful brand over the long term, despite the difficulties the company had after the 2007 Valentine's Day debacle, when passengers sat on the tarmac at JFK for 11 hours before flights were finally canceled. In May, the airline debuted its “Happy Jetting” branding campaign and has focused on interactive and word-of-mouth marketing. “They've built their brand and focused on experience from day one,” St. Germain said.
Word-of-mouth marketing is fast becoming a key to marketing success for airlines because so many customers discuss their experiences on the Web.
But rather than taking advantage of social media opportunities, most carriers are making little effort to control the conversations customers are having about them, Harteveldt said. Instead, disgruntled travelers' comments go unaddressed on community forums such as FlyerTalk and in blogs such as Cranky Flier.
The most egregious example of such neglect, Harteveldt said, is a blog started by American Airlines in April, when the FAA grounded the company's fleet of MD-80 planes to perform maintenance checks. The blog had a few posts that month but, as of press time, had not been updated since then.
Harteveldt said he gives American credit for attempting to use a blog to respond to a crisis; however, he said, the airline didn't follow through and deserves the criticism it's received in the blogosphere. (One sardonic blog headline read “American Airlines' blog is as good as its flights.”)
“They did the worst possible thing,” Harteveldt said. “They entered the social networking space and then botched it, adding insult to injury.” M