Branded
By Tim Pedersen- Low Cost Airline Business

The battle for dominance in the skies is well underway and while favourable pricing may be persuasive, over time branding is key. Jo Murray reports

When Business Week published the latest ranking of 100 top brands, no airlines made the list. Why? It is too hard to separate the impact of an airline’s brand on sales from the impact of operational factors such as route development and scheduling. While the economic value of an airline brand is perhaps determined more by art than by science, an airline – and particularly a low-cost airline – neglects its brand at its peril.

Brand – the differentiator

If low price, convenient scheduling, good airport access and all the other areas on which a low-cost airline markets itself are considered “givens”, what makes an airline different? “The difference is the brand,” asserts Peter Knapp, Executive Creative Director – Europe and Middle East at Landor Associates, the international branding and design consultants. “If you can’t appeal because your price is the same as or similar to the competition and your destinations are the same as or similar to the competition, what do you create that preference with? Your brand.”

Surely, being low-cost, branding should be an area on which low-cost airlines are not spending money and yet their brands are integral to load factors, profits and longevity. How do you reconcile these two opposites?

Daniel Baron, Director of Branding – International at Bio System, the Japanese branding consultancy that designed the low-fares Oasis Hong Kong Airlines brand identity, comments: “I don't think these are opposites at all. Spending money on branding isn’t really about the model per se. After all, no matter what kind of airline you are, you still have to spend money on aircraft paint, on a website and on seat covers. Good design and bad design cost the same.”

He continues: “What’s important is creating a brand identity that truly resonates with the target market. In fact, this is particularly so in the low-fare universe, because fare, not schedule or miles, is the primary driver. If brands X, Y, and Z are all £15, the airline that connects with the consumer in terms of brand is likely to win the business.”

Low-cost meets legacy

Does this mean the playing field is now more open to full-service airlines than previously? “Absolutely,” Knapp replies. “In fact, I think they’re in a slightly more advantageous state at the moment because their brands are more mature and they have learned how to streamline their businesses operationally in order to make them more competitive with the low-cost airlines.”

“What the full-service airlines are now offering is price parity and good departure and destination airports, but also more mature brands that are more sophisticated and are able to focus on different types of audience,” comments Knapp. “I think the advantage is starting to turn.”

Knapp comments that many low-cost airlines will face a period of pain as they compete directly with the full-service airlines. To date, he maintains, the low-cost airlines have avoided that war because they were able to win a bloody battle on price alone. “Their brands are more and more important if they are to become an attractive magnet of preference,” asserts Knapp.

The pain to come is seen by some as an opportunity. “Low-cost airlines have an interesting opportunity,” comments Tim Pedersen, Principal at Right Brain Branding Consultants. He says that when a low-cost airline enters the market with a clear-cut picture of who it is and what it is going to do, that is much easier proposition than being a legacy carrier which is changing its strategy, cutting back services and becoming visibly “cheaper”.

So is building a low-cost airline brand the same process as building a full-service airline brand? Is a brand a brand? “From a branding point of view, there is no difference. The fundamental
issues are the same for both,” says Baron. “It’s all about innovation,” adds Knapp. “The two words that I would advocate are critically important to any commercial brand are: ‘relevant differentiation’. You’ve got to be different from your competitor and you’ve got to be relevant to your customer. It’s that simple.”

The sticking points

Asked whether low-cost, no-frills, low-fare air-travel means “cheap”, Knapp says: “It can be cheap but it doesn’t have to be unattractive.” “Being cheap is not a brand,” comments Pedersen. “Airlines have to create a brand that people want to buy into.”

The branding conundrum facing many low-cost airlines is complex. How to serve the business-man with a slashed travel budget who nevertheless requires some forms of pampering as well as serving the hordes of leisure travellers – that have been unleashed by the low-cost phenomenon – and still make the brand communicate to all people is not easy, but some have achieved branding success. Take Go, the former British Airways subsidiary, for example. Bright and cheerful the brand may have been but it was still slick enough for the business man to climb aboard. “Today we have discerning, sophisticated customers,” comments Knapp.

There are many charismatic leaders in the low-cost airline business. Do you build a brand around personalities or strategy or future plans? Where do you start? “Charisma may help to leverage a brand via publicity and PR,” says Baron. “But it isn't a substitute for the basics; that is safety, reliability and integrity. Any airline should build its brand around strategy first; no level of
charisma will get bums on seats if the strategy and its execution don’t match the needs of the market.”

Knapp warns that a charismatic leader at the helm of the airline can be the focus negative attention. After all, when things go wrong, passengers may personally blame the figurehead and not the weather, air traffic control or anyone else. The finger is pointed at the personality. But Pedersen points out that personalities can help: “When there is a great entrepreneur leading the enterprise with a great idea and the ability to build a great team, often the culture that becomes the brand will follow.

Furthermore, for some, loyalty to the airline of the passenger’s home country is waning. “It’s more about commodatisation than nationality,” explains Knapp, adding that the flag-carriers continue to attract the sentiment that in the final analysis, it will be the flag-carrier that will bring you home. “It is harder for a low-cost airline to hold all the attributes of the national brand within what is a very thin brand framework.”

But the regional aspect of short-haul low-cost travel can be seen as an advantage, especially in the US. As Pedersen points out, the more defined in your marketing you can be, the more likely you will hit your target. “The legacy carriers have been shooting arrows and hoping they are going to hit something. The low-cost airlines have the opportunity to have a clearly defined target,” adds Pedersen.”

What to do?

Given the sticking points, what does a low-cost airline need to do to ensure longevity. Pedersen says his role is to help a client build its culture. “What Southwest has done, and done well, is enable you to go to any of its flight attendants and ask them what their brand is about and they can tell you. They understand their brand.” Pedersen continues: “You have to have integrity within the upper echelons to fulfil the brand. If they are not fulfilling it, they are not living the brand and then they send out the wrong signals to the rest of the crew.”

To what extent is a brand about a logo? “While a logo is certainly important in creating an emotional link to the brand and helping a brand differentiate itself from the competition, it
is only one element in the big scheme of things,” says Baron. “A brand is a proposition; a set of promises. The airline’s logo, livery, interior, signage system and website are there to communicate that proposition collectively. The brand works to leverage the positives in good
times; but also serves as an airline’s armour in bad times. The strongest brands can withstand anything. It’s not just about designing a cool logo, but about nurturing the brand as a whole organic entity.”

For Pedersen, what counts is not so much the logo as the experience that you associate with the logo. “What you have to be sure of is that the emotions resulting from that symbol are the right ones,” he adds.

So what is the key message a branding guru would deliver to any airline about brand development, recognition and nurturing? “Low-cost airlines need to invest in their brands,” says Knapp. “All things being equal, you want to create an advantage in the market-place. You have to leverage everything that you possibly can to your advantage.”

“I would urge airlines to be bold and daring. No guts; no glory,” says Baron. “The most successful airline brands are the ones that take risks, try novel ideas and go beyond convention in terms of design and/or product. The rewards for not settling for the lowest common denominator are there to reap.”

Hitting the mark – Centralwings asks the market if its brand works

In the final analysis, what really counts is that the market at which an airline is aiming its services recognises the brand and emotes favourably towards it. Take, for example, a fairly contained – but rapidly sprawling, low-cost airline market like eastern Europe: plenty of airline players and an increasingly mobilised public with more to spend and opportunities to explore.

To find out whether its brand was easily recognised by the local market amongst the melee of low-cost/low-fares offerings in eastern Europe, Centralwings commissioned brand awareness research – carried out by AC Nielsen – comprising 706 face-to-face interviews with Polish people aged 18 to 45 in Polish cities of over 100,000 inhabitants; Centralwings’ target market.

So what did the branding research show? “Centralwings is number one in the target market, but we also found that in the group of people who already use low-cost airlines, we are number two after Wizz Air, the Hungarian low-cost carrier,” explains Piotr Jakubowski, Advertising Specialist at Centralwings, adding that Wizz Air has a one-year advantage over Centralwings in terms of operations.

Asked whether the research showed what the people of Poland associated with the Centralwings brand, Jakubowski says: “They definitely associate Centralwings with Poland although the name is English.” He continues: “For some people the fact that we belong to LOT is a good quality because LOT is the national carrier and it has such a long tradition in the airline business and it certainly has the sort of financial background that makes them feel more secure about the airline. But for other people there are also negatives because of bureaucracy. There is no single conclusion.”

“When we asked the question: which factors make you decide which low-cost carrier to choose, the Polish people said that price is number one, promotions is number two and other features were not very significant,” says Jakubowski. “We keep communicating the fact that we are Polish. Polish people like to travel with Polish carriers. They appreciate the fact that the flight attendants are Polish and they like to support a company that pays taxes in Poland,” says Jakubowski. “For them, travelling with Centralwings is a form of patriotism.”