Airline Brands: Piloting A Failing Business Model and Brand Experience
Backstory: American Airlines has created a new secondary market for its coach-class seats; "Express Seats," is now merchandising tiers of front, second, maybe third, and bulkhead seats at a premium. Priced between $19 and $39, and depending on length of flight, Express Seat consumers also board as Group 1 designators. An 'open-market' platform encourages 'first come, first serve' mentality. Another airline fee that the category might adopt.
Crosscuts: Current Events x Travel & Leisure
Culture Cut: We take flying for granted as a modern society today. The Wright Brothers didn't. They created aviation for human consumption - emotional consumption, not necessarily solving the problem of getting "from A to B faster." They weren't going anywhere And the Jet Age could arguably be considered a primary accelerant of instant consumerism behavior that has conditioned the American consumer to want everything now.
Flying made the technology possible to bring us closer together since the introduction of the (BA) Boeing 747 in 1970. Without the jumbo jet, I wouldn't be attempting to write this. We fly to stay connected - in that way, that U.S. airline brands and consumers both agree: modern air travel facilitates human connection. But the business of commercial aviation has forgotten this.
Commerce Cut: U.S. airlines grew ancillary fee revenue, e.g., bag check, food, etc, 40% to $7.8 billion in 2009 from $5.5 billion in 2008. Many consumers would agree they don't get value or satisfaction for their purchase, and hold the airline category in low regard and esteem.
Every day, 2 million people, 50,000 tons of cargo and more than one million bags travel on board 25,000 U.S. airline flights to point B. Commercial aviation supports nearly 11M U.S. jobs and contributes $731.5B to U.S. GDP. If this critical industry is so vital, why doesn't the business or brand model work anymore? We were taught that deregulation would increase competition. It didn't; it just gave the flying consumer a larger set of inferior brands. Nice.
The U.S. airline industry was deregulated in 1978, essentially lowering the barriers to entry to anyone who had money and a tolerance for risk. There are at least 20 US airline brands; since 2002 twelve commercial airlines filed for bankruptcy. American Airlines (AMR) has the distinction of being the best of the worst. Low-cost airline travel and OTA's (online travel agents) have made flying more accessible, technology has created new revenue models, and brands have found innovative methods to design and create experiences that should exist but don't.
Continued on the next page
Follow Technorati