Europe: 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? 

Reports coming out of the Spanish press today suggest British Airways might be ready to accept a 55% stake in its planned merger with Oneworld partner Iberia, as the two carriers close in on finalising a deal this month.

Both BA boss Willie Walsh and his counterpart at Iberia Fernando Conte spoke last month of growing momentum in the talks, which had stalled over issues including the Spanish carrier seeking more information relating to BA's final salary-based pensions schemes. The talks have since been focusing on other issues, including what the split in ownership between BA and Iberia in the new company would be. The proposed deal is an all-share merger and has been complicated by the weakening of Sterling and BA's share price, which has significantly reduced the stock market value of BA in relation to Iberia since the merger plans were first announced last summer.

Now a report in Spain's El Economista today, citing sources close to the talks, suggests BA is ready to settle for a 55% equity stake in a merged carrier. BA itself says only talks continue, but its shares were up more than 6% today off the back of the reports

Here is the press release we issued yesterday following the Loyalty 2009 Awards.

And, here's the picture, from left to right: Global Flight's Ravindra Bhagwanani, Shahab Shadman of Amadeus, Anita Hawthorne of Air New Zealand (with the gong!) and Mark Pilling of Airline Business.

PRESS RELEASE:

Air New Zealand recognised for leading frequent flier programme

Air New Zealand wins award for the airline industry's most innovative frequent flier programme at Loyalty 2009 conference

Vienna, 12 February 2009: The outright winner of the 2009 Loyalty Awards was named as Air New Zealand at the Loyalty 2009 event gala dinner.

Launched at the inaugural Loyalty conference (www.loyalty09.com), organised by Airline Business and Global Flight and held in Austrian capital Vienna, the awards recognise the airline industry's best frequent flier programmes.

This year's Loyalty Awards went to Air New Zealand, Corsairfly and Emirates.

Air New Zealand was chosen by the 250 delegates at the event as the most outstanding loyalty programme.

"Air New Zealand's Airpoints loyalty programme combines the creative use of mobile and web technology to radically enhance its customer experience," said Iain Webster, Loyalty Business Development Consultant, who was one of the Loyalty Awards judges.

Air New Zealand uses new mobile and web technology to give customers full control of their pre-travel and travel experience with the needs of frequent fliers in mind.

The airline's award was collected by Anita Hawthorne, Manager Airpoints, Air New Zealand. "We are delighted that our customer led innovations have been recognised by the global loyalty community.  By using frequent flyer information Air New Zealand has improved the end to end customer experience with the airline," she said. 

Commenting on the Corsairfly award, judge Santiago Ontañón, General Manager, Mexicana Loyalty, said: "Corsairfly has executed a very creative way of doing a friends and family loyalty programme - it is very simple and developed for a clear target market."

French carrier Corsairfly has introduced a family focused programme in line with its overall strategy catering mainly for leisure travel.

Commenting on the Emirates Awards for its SkyRewards programme, judge Herbert, Verschuren, Director Flying Blue, Air France KLM, said: "Emirates have done what many airlines would love to do - offer seat upgrades on board."

Emirates has introduced a last-minute upgrade option for its top clients allowing them to upgrade to a higher class either at check-in or even on board the aircraft.

The Loyalty 2009 judges:

Santiago Ontañón, General Manager, Mexicana Loyalty

Herbert Verschuren, Director Flying Blue, Air France KLM

Iain Webster, Loyalty Business Development Consultant

Ravindra Bhagwanani, Managing Director, Global Flight

About Airline Business

The Airline Business brand is the one that airline executives turn to - whether in print, on the web or at face-to-face events - when they need to make sense of our turbulent industry.
At the core of the brand is insightful, impartial and in-depth analysis and intelligence provided by the Airline Business editorial team in London, Singapore and Washington.  That team is committed to the highest standards of reporting and providing the best value for time and money possible at its events.  With its mission as being "The magazine for the airline boardroom" Airline Business focuses on the leaders and business critical issues that drive our industry forward.
Throughout the year we will continue to invest in providing our world renowned Rankings and Special Reports, such as the World Airline Rankings, which appear every month in print.

www.flightglobal.com/AB

About Global Flight

Global Flight is a specialised management company providing management-related services to airlines worldwide in the FFP/CRM field. Based on an unparalleled knowledge of all some 180 Frequent Flyer Programmes and its ability to adapt to the individual requirements of each airline, the company's customer basis has grown since 1996 to include all types of airlines from Top 10 to regional airlines worldwide.
Privately owned and acting independently of any suppliers, the company can fully focus on delivering value at the critical management level of loyalty issues rather than upselling other products or services.
www.globalflight.net

For more information

Ravindra Bhagwanani, Managing Director, Global Flight:
Tel: +33 5 61 71 16 57
E-mail: info@globalflight.net

As Flightglobal's web community editor Stuart Clarke commented to me just now - "this man is relentless".

See publicity magnet Sir Richard Branson doing his bit to save marketing dollars by being the news and photo fodder.

Sir Dick - as he likes to be know - is also doing his bit of self-publicity on the blogosphere or Twittosphere.

Here is a story I am posting directly from the Airline Business/Global Flight meeting here in Vienna where some 250 experts from the frequent flier side of this industry have gathered.

Newly appointed joint leader of troubled Austrian Airlines Andreas Bierwirth, looking pretty bright considering he'd been in an emergency board meeting the day before until 2130, took us through the airline's survival strategy.

Austrian working to late summer deadline for Lufthansa takeover approval

Vienna, 10 February 2009: Austrian Airlines is putting in place a series of emergency cost-cutting measures to ensure it can survive until the second half of the year when its take over by Lufthansa is expected to be finalised.

"Yes we will survive but not independently - ours is not a future as a stand alone carrier," said Andreas Bierwirth, board member and chief commercial officer of Austrian Airlines, speaking today at the Loyalty 2009 conference organised by Airline Business and Global Flight.

Management's task is to ensure the airline has enough cash to remain viable until the take over is approved in the August-September timeframe by the European Commission, said Bierwirth. "We are convinced we will do it," he said. Lufthansa was selected as the strategic partner for Austrian in November.

"We want to save in the short-term about €220 million, half from production cuts," said Bierwirth. Another €50 million will come from staff salary cuts. The target is for a 5% cut in staff salaries across the airline with management taking a 7.5% cut, he said.

Austrian is also having talks with its suppliers for cost cuts. "There is for example Vienna Airport - it is very profitable - and we expect from them and [Austrian] oil company OMV a crisis path to help Austrian," said Bierwirth.

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? 

Well that's how I feel now that I've started this Twittering business. Blogs are history. Long live Twittering.

OK, that's not true! I've got to feel loyal to blogging. It has served us well in the past couple of years that we've been doing it as a team here at Airline Business. We are getting over 4,000 visits to our blog a week, which is none too shabby. Although we are well in the shade of our blogmeister general here at Flightglobal - Jon Ostrower's Flightblogger.

Now I am going to be loyal to blogging, especially as I am on the way, via Heathrow Terminal 2 (very quiet), to Vienna for our new Loyalty event, which we are doing in partnership with FFP guru Ravindra Bhagwanani.

There is a long list of Twitters in the Flightglobal stable. Check out Jon Ostrower, Andrew Doyle, Victoria Moores, Mike Targett and Stuart Clarke, plus lots of others.

Take a look at where they are and what they are saying.

Now to liven up this blog a little here is a photo. This Clickair A320 was just rolling to the gate here at T2 when I arrived. In the background are some bmi A320s and its fellow Star Alliance partners United Airlines and US Airways.

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!   

The wonders of the web mean we can tell you this, and keep on posting blogs and updating the Airlines Channel of Flightglobal.com. Which we will.

So the south of the UK is at a virtual standstill because of a bit of snow - well a foot. In our country this is very rare and we can't get about. I know a lot of you in colder climates scoff at our difficulties. This is a time to get scoffing!

Heathrow's two runways were closed as of 0815 while Gatwick and Stansted are severely disrupted.

You will be pleased to know that snow is not falling in Singapore or Washington DC, where our other offices are based. So normal service there.

We'll try and keep our service as normal as possible from the UK too.

In the meantime, some nice pictures of snow in the road outside my house (above) and in my garden.