The Hindu Business Line : On different flight paths

Aviation fuel prices are high, while the slowdown has led to a dip in the passenger numbers. Then again, with a number of new domestic players starting operations over the last few years, competition is becoming tougher by the day.

In such turbulent times, running a successful airline is anything but easy. Nusli Wadia, Chairman of the Bombay Dyeing Group which runs domestic carrier GoAir, made similar observations in the media recently. Going by the recent (but hence withdrawn) threat of the Federation of Indian Airlines (FIA) to stop operations on August 18, GoAir is not the only airline going through a rough patch.

While the constants are fuel prices and the pool of passengers, how is it that some players do better? The difference probably lies in how they approach the market.

Industry analysts say that though different business models might vary by the segment the airlines target, marketing and brand-building exercises certainly play a huge role. Says Harish Bijoor, brand domain expert and CEO, Harish Bijoor Consults, “A good marketing strategy with a clear and cogent stance that is protected through good times and bad is very essential,” he says.

“Branding sustains itself through service delivery and quality. It is a small industry where each player is known for its niche category,” says Rajiv Batra, Head (Transport Advisory Services), KPMG.

Bijoor explains how airline branding developed in the country. “In the beginning, the airline was a commodity in the domestic market, with just one national airline — Indian Airlines. Then in came the private airlines, with Damania, Modiluft and a few others. This began the brand wars. Damania offered excellent service, even liquor for a while. These brands invested in building a brand, a colour-recall, a service-memory tag and more. The brand wars intensified with the entry of Jet and Air Deccan, which created the low cost option with the common man as its brand icon.”

However, he says, that the industry has now come full circle — from commodity to brands to commodity again. “The current situation has erased all lines of branding. Clear positioning has been erased. Today, one chooses an airline on the basis of the price and convenience of sector,” he says.

Nevertheless, the brand recall guaranteed through a good marketing strategy is pointed out by Kuljit Singh, Partner, Ernst & Young. “Marketing strategies have a huge impact on top-of-the-mind recall value,” he says.

The same is underlined by Vikram Malhotra, Vice President (Marketing), Kingfisher Airlines. “When Kingfisher was launched, we were a challenger brand that came in and upped the ante on guest service in order to gain rapid consumer acceptance and brand connect. In a short span of four-and-a half years, our brand strategy has changed to portray the image of a thought leader and innovation driver in the industry,” he says.

Kingfisher, which initially targeted the premium segment, now operates in three price segments — the no-frills and low-cost Kingfisher Red, the all economy Kingfisher Class and Kingfisher First. “The Kingfisher Airlines brand stands for warmth, innovation, vibrancy and service. Our branding efforts strive to portray these brand values across touch-points,” adds Malhotra.

Low cost carrier Spicejet believes that brand-building is a continuous process. “Each of the 14 million passengers who have flown with us in the past four years have responded positively to the brand image. In ways big and small, they have been responsible for shaping our brand,” says Anish Srikrishna, Senior Vice-President (Marketing), SpiceJet. He adds that every feature offered by SpiceJet is a direct outcome of a specific customer feedback.

M. Thiagarajan, Managing Director, Paramount Airways, has a different approach. According to him, the benefits of a premium airline can be provided at affordable prices. “We have a unique business model. At a time when the Indian aviation industry was abuzz with low cost carriers, we believed that there should be a way to offer the best services at the best prices,” he says.

According to Bijoor, however, there is little space for such distinction in an airline which covers a relatively smaller market. “Niche airline offerings such as Paramount do not cover a statistically significant portion of the market. Today brand distinctions are by default and usually more by accident than by design. Kingfisher is possibly the only airline that has maintained some degree of brand integrity on this count,” he says.

KPMG’s Rajiv Batra, feels that the reason for yet another airline Indigo’s success is its innovative marketing. “Indigo has chosen to go through the Internet model, like the booking portals, rather than the regular media. This proves to be a very cost-effective solution,” he says.

Of the international airlines, German carrier Lufthansa feels that up-to-date customer intelligence is most important in its marketing promotions.Lufthansa is also targeting its marketing strategies towards groups such as tourists and immigrants. It has started advertising at cineplexes, bus shelters and pubs. To target student travellers, it has tie-ups with various institutes.

“These innovative approaches have helped us to engage with the customer at a different level and reach travellers in more ways than one,” says Sangeeta Sharma, Manager - Marketing Communications, Lufthansa South Asia.

In the capital-intensive airline industry, it takes a while for any investment to reap significant benefits. “A good branding programme in aviation takes as much as 20-plus years plus of dedicated investment and nurturing of intent,” says Bijoor.

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