Airlines: February 2009 Archives

Irish budget carrier Ryanair - long renowned for squeezing every last drop and then some out of ancillary revenue opportunities - has entered into a partnership with advertising agency AD2ONE that will allow other companies to advertise on its website.

The carrier calls its website an "advertiser's dream", and says that allowing adverts to appear on the site will enable it to "grow this new form of revenue, which will lower our costs and help us to lower fares".

A recent survey carried out exclusively by Airline Business, the results of which you can read here as part of our recent marketing feature, showed that 81% of respondents rate the internet as being "very important" to their marketing strategies this year, and this latest move from Ryanair shows the carrier to be no exception.

However, another online trend highlighted by our survey might not be so appealing to Ryanair: social marketing. Judging by this earlier blog from my colleague Michael Targett, Ryanair will not be joining the blogosphere any time soon, having railed against what it calls "idiot and lunatic bloggers".

Well this lunatic blogger is tired of blogging about Ryanair now so will sign off for now. Ironically, though, they do provide an endless supply of blogging material...

Almost a year on from the shambolic opening of British Airways' spanking new Terminal 5 at London Heathrow, evidence is beginning to emerge of the damage it has caused to BA's brand.

According to the Business Superbrands survey for 2009, carried out by the UK-based Centre for Brand Analysis , BA's brand position in the UK has plummeted from number 8 in 2008 to number 36 this year.

To rub salt into the wound, the survey also reveals that BA's arch-rival, Virgin Atlantic, has improved its brand position in the UK to number 25, up from number 28 in 2008.

T5 opened on 27 March last year amid a fanfare from BA about how wonderful it would be, and how it was an "opportunity of a lifetime" for the carrier. But things did not go smoothly and the opening quickly turned into a highly-publicised disaster. To read my full account of the run-up to T5's opening, the shambles that followed and the desperate attempts to pick up the pieces, visit my 2008 end of year blog.

On releasing the survey, Stephen Cheliotis, chief executive of the Centre for Brand Analysis, said: "Our research suggests that the more discerning business professionals might have had enough. After another turbulent year, including the T5 debacle, [BA] has for the first time fallen out of the Business Superbrands Top Ten.

"This is a worrying sign for an airline that is heavily reliant on its business customers, and with competition for flyers at an all-time high, and pressure on airlines so intense, clearly a reduction in the brand value of British Airways could in financial terms be significant."

For its part, BA is keenly aware of the impact the opening of T5 had on its reputation. To counter this, it launched its "Terminal 5 is working" ad campaign, and has set aside part of its website to showcase what passengers now think of the terminal.

I've been through Terminal 5 once, after the dust had settled and it was doing what it was supposed to do, and I was impressed. The question is, how many former BA passengers have been put off for life, and how many will show their forgiving side and give the carrier another chance? 

 

If you didn't know the name Sir Allen Stanford a week ago, you certainly do now following the US authorities charging him and three of his companies with an alleged fraudulent multi-billion dollar investment scheme. But one region where they certainly did know the Stanford name is in the Caribbean (his Stanford International Bank was based in Antigua), not least because of his attempt to ignite Caribbean cricket through his $20 million winner takes-all 20:20 Stanford Superstars v England game last year.

For an interesting perspective on Sir Allen Stanford high-profile presence in the Caribbean and what his fall could mean for the region, check-out this guest blog from chief executive of Caribbean regional carrier LIAT, Mark Darby.

http://www.flightglobal.com/articles/2009/02/24/323009/liats-mark-darby-blogs-on-sir-allen-stanford.html

 

Virgin Atlantic president Sir Richard Branson has flagged the importance of social media channels, such as Facebook, during a media briefing in Hong Kong.

The stop, en route to Sydney, forms part of Branson's 'around the world in eight days' journey. The trip is aims to promote Virgin's new global connectivity, with the launch of Virgin Blue's new long-haul arm, V Australia.

During the briefing Branson said: "We take the Internet very seriously." He highlighted the fact that young people are increasingly using the Internet as a news channel, in favour of print publications, adding: "Things like Facebook are an essential part of many, many people's lives."

So Ryanair has formally launched its onboard mobile phone service. In the in-flight mobile connectivity world this is a big deal. Ryanair is not the first, nor does it yet have the largest number of aircraft equipped with a service allowing passengers to use their mobile phones onboard - Air France was the first commercial airline to trial OnAir's service at the end of 2007 and Emirates has been flying for nearly a year with the Aeromobile voice and text service and already has more than 30 aircraft equipped.

But for OnAir this is a red letter day. While it has plenty of customers in the books, Wataniya and three single aircraft trials are all that have flown in the commercial airline space to date. Ryanair's eagerness to start with 20 aircraft - growing to nearly 50 in the next six months -guarantees some critical mass. With Royal Jordanian, AirAsia, Oman Air and AirBlue among those to follow this year it hopes to have up to 100 aircraft flying by year end. Together with Aeromobile's further roll-outs and with Emirates recently trumpeting its 100,000th call, this year should finally be one of momentum to what has thus far been an arduous path. In short, we should at last get some real idea if and how people will use phones onboard.

In principle I had my chance to try this out for myself, having taken two OnAir-equipped Ryanair flights in the space of 24hrs. I say in principle, as my Blackberry powered by Vodaphone in the UK could not get a signal other than emergency calls (they were very good about it, but did not seem to think me ringing to say I was calling from the sky was an ACTUAL emergency). So here in lies another of the difficulties for an airline marketing these services in these early stages of roll-out. Not only does an airline have to manage passenger expectations of whether they will be on one of the flights operated by an aircraft where you can use your phone, but it also depends on who your phone's mobile operator. OnAir has roaming agreements in place with two key players in Ireland - alongside 50 operators across Ireland and is now working to fill in the gaps, notably with key Irish operators 3 and Meteor.

 

But if Ryanair is cautious about over-promising on the service, it is not holding back should you find yourself on a phone-equipped aircraft. Adverts promoting the service adorn the overhead bins, while there are some overhead lights featuring a red Please Turn Off/ and a green Phone Use Permitted sign in the aisle.  Cabin crew also announce when the service is about to become available - it is only switched outside take-off and landing phases.

On my flights I found it quite entertaining watching the double-takes around me as people suddenly realised the crew were saying you COULD use your phone. Now the many regulatory hurdles have been overcome, this is one of the major challenges to get the message across that on some flights, mobile phones and blackberrys can be used.

"It will take time, not like the [instant move to] non-smoking," acknowledges OnAir chief executive Benoit Debains. "People have been used to not using their phones onboard."

By the way, thank to Lars at Inmarsat for the Ryanair pictures. For more on phones, onboard connectivity and all things in-flight entertainment, do check out if you have not already the excellent Runway Girl blog

After a pretty tortuous path overcoming the regulatory hurdles, there appear increasing signs we might be getting a bit closer to finding out how popular mobile phone use onboard aircraft is going to be, as there is a bit of momentum among the airlines testing the water. Interesting figures from Emirates today, the first to go live with the AeroMobile service nearly a year ago. It started allowing passenger to make voice calls with their mobile onboard last March and its now available on 31 aircraft. On 15 February it passed a milestone by logging its 100,000th call. But pointing to momentum for the service, the companies say half of these calls were logged in the last two months alone and AeroMobile chief Bjorn-Taale Sandbe says:

"The sharp increase is not due only to the wider availability as our system is rolled out across the Emirates fleet, but the acceptance from passengers of what a valuable and stable service it is."

 

Plenty of airlines have signed up for these services as well and its a real horses for courses, depending on what type of carrier or where in the world you are, as to whether the driver for this is as a service offering or ancillary revenue driver. The same is true as to whether carriers want voice calls, e-mails or texting, or all of, or none of.

One of the latest to sign up is BA, but its opting for e-mail and text messaging capability only its all-business transatlantic service from London City. Air France, TAP Portugal and now bmi have all been carrying out tests of the OnAir service already, and Ryanair will finally go live with its trial of the OnAir service by the end of the month. This promises to be one of the most informative, as not only are is the Irish carrier starting relatively big - it will initially deploy the service on 20 Dublin-based aircraft with another 20 equipped by summer - it is the first carrier to deploy which is primarily driven by its potential for ancillary revenues.

The next few months in this sector promise to be interesting.

For more on this check out this article Mary Kirby wrote for Airline Business late last year.

The new Virgin Atlantic TV ad, which I blogged about earlier, has apparently been getting some people's hackles up for being sexist.

According to this report in The Guardian, the UK's Advertising Standards Agency has been forced to dismiss complaints that the advert is sexist and insulting to women.

Oh pur-lease, sometimes it feels as though all some people do is look for things they're "offended" by and then make formal complaints. It reminds me of British campaigner Mary Whitehouse, who used to prattle on about the decline in moral decency on television.

Sometimes she was so offended by the sexual content of certain TV shows that, rather than switch over to another channel, she'd watch the whole programme before picking up her pen and paper and complaining about how disgusted she was.

Was anyone else offended by this advert? Or did most of you just passively watch it, maybe have a slight chuckle about the over-sized 1980s mobile phones, and then continue having a life? 

   

Never one to miss an opportunity, Ryanair, which today reported a a third quarter net loss of EUR102 million, says it expects to benefit from "traffic collapses" at European airports.

Here's what Ryanair chief executive Michael O'Leary had to say on the matter: "The dramatic cut in flights and capacity by many of Europe's flag carriers has created traffic collapses at many of Europe's larger airports. This is creating enormous opportunities for Ryanair, as these airports compete to reduce charges in order to attract Ryanair's growth and to develop low-cost facilities to take advantage of Ryanair's quick turnarounds and our improved web check-in facilities.

"This movement towards lower cost, more efficient airports in Europe is welcome, even if it is 20 years too late."

And this is not where Ryanair's optimism ends. It sees itself as the "Lidl, Aldi, Ikea and McDonald's" of the airline industry, with O'Leary boasting that "the longer and deeper this recession, the better it will be for the lowest cost producers in every sector".

Despite the losses posted by Ryanair this morning, O'Leary says it will return to "substantial profitability next year", and will be one of "four large European airlines" left in the market - the others being "high fare fuel surchargers" Air France, British Airways and Lufthansa.

Say what you like about O'Leary, but he can't be accused of pessimism or bashfulness!

 

Posted by Kerry Ezard, who is stranded at home by the snow and unable to log in to her own blogging account!