Healthy Turbulence in the Friendly Skies

If you took representatives from every airline in the world and put them in a big room, it would be a miserable affair these days. Not only is the industry still feeling aftershocks from Sept. 11, it is suffering from anemic revenues from a flat-out price war. And it is suffering from a marketing and advertising malaise that is hard to quantify but easy to see when you look at the dearth of innovation in campaigns and strategies. With some notable exceptions.

"We’re very self-conscious about our success," says JetBlue marketing VP Amy Curtis-McIntyre. "We would be the only ones in that room with a secret smile."

And well they should. JetBlue Airways, along with Continental Airlines, is shaking up the staid world of airline marketing and advertising with new strategies, new tactics, and an obsessive focus on tracking customer preferences and delivering on them. By giving customers what they want, these airlines have used a connection to the customer as a way to develop a successful brand and carry the message of that brand through advertising.

"JetBlue and Continental are talking about things that resonate with travelers," says Dr. Robert Passikoff, CEO of marketing consultancy BrandKeys. "Most airlines don’t know what customers want, and they don’t even want to make the investment to know what they want. JetBlue especially has done that and is succeeding."

JetBlue is a two-year-old venture that has put a successful new spin on the concept of budget travel. While the rest of the industry was getting whacked in June, JetBlue posted a 100% revenue jump. Past ventures in this area, such as 1980s icons People’s Express and Laker Air, were able to offer cut-rate fares by cutting back on amenities and infrastructure. The result at first was successful, but passengers grew tired of the crowded planes and missed arrival times. JetBlue has taken a different tactic. Its fares are low, but not rock-bottom. And it has spent money where customers told it to spend money. The planes are new, plush, and comfortable. In-flight attendants have sharp uniforms and a crisp, businesslike manner. Bad airplane food has been traded for gourmet snacks. In its advertising JetBlue has focused on the customer experience on the plane while its competitors are stuck on reliability, security, and on-time arrivals. Those attributes may not sell an airline in these times.

"Give all the credit to JetBlue," says Dr. Alan Bender, a professor of airline marketing at Embry-Riddle Aeronautical University. "One of the things this business is finding out is that low fares alone won’t get it done. The big airlines operate on the game called ‘tie, you lose.’ That means if you as a small carrier drop your prices, they will too. But the business needs to take a look at that approach. Cheap can be matched. A distinct product cannot be matched."

Bender says advertising and marketing are more important than ever for airline brands. In fact, he believes the airline business is entering an unprecedented period of change that will require radical reworking of business models and ad approaches for American, United, Delta, and the other big national carriers. That unprecedented environment is driven by three factors. The first is the economy, which has led business fliers to look for cheaper fares and cut down on overall travel. The second is the security factor, which has made getting on a plane a time-consuming, anxiety-ridden hassle. The third is the price war, which has decreased revenues. This triple whammy may not drive airlines out of business, but it will force them to focus advertising more on the in-flight experience and less on the tried-and-true elements of arrival times and "old guard" reliability.

Passikoff believes the shift in the airline business that left the door wide open for JetBlue’s approach has come from the consumer. According to his company’s Brand Loyalty index, Continental has been the leading airline for the past two years. Passikoff attributes that to the brand’s focus on the customer experience, which includes on-time departures and arrivals. The top four elements travelers looked for in an airline before Sept. 11 were safety, experience, in-flight comfort, and booking efficiency. "Welcome to the 21st century," says Passikoff. "Now we don’t have brands as much as we have well-known commodities. Those commodities have not realized that currently the most important element to the customer is the in-flight experience. Longevity in the marketplace isn’t so important anymore. And that has left the door wide open for JetBlue."

JetBlue’s marketing team knew it was dealing with a category that had relied on frequent-flyer miles as the sole basis for its marketing for years. According to Curtis-McIntyre, it started with a blank slate and used extensive marketing research before the brand’s launch to identify how it could differentiate itself from other low-cost carriers and more well-heeled competition. It became obvious that appealing to the customer’s common sense and preference for comfortable flying was the correct route. "I think it is absolutely mind-blowing that other companies have overlooked that strategy," says Curtis-McIntyre. "Right now airlines market their in-flight experience based on a preponderance of costly extras that the consumer usually makes fun of. Who likes airline food? Why have it?"

From a creative and planning perspective, JetBlue’s ads are modeled on the VW Beetle strategy of making customers feel special about a low-end purchase. The ad vehicles — business publications, outdoor, and radio — are not very different from standard air fare. But the extra element of guerrilla marketing is different. Street teams handed out JetBlue Frisbees in Santa Monica and in the subways of New York. Concierges at key hotels were given JetBlue airbags to hand out. A new print campaign breaks this month. Despite Curtis-McIntyre’s comment that the customer experience has been overlooked, Continental Airlines has also taken an innovative approach to marketing and advertising. It posted a slight increase over last year for its June traffic, but has been vulnerable to the cut in business travel. Its advertising effort has focused mainly on New York City. It is the official airline of the Knicks, Rangers, and Yankees. It has been the name sponsor for New Jersey’s Continental Arena for two years. It is one of metro New York’s biggest advertisers in any category, working newspaper and outdoor ads especially hard. It has recently branched out to advertise more in its Houston hub, sponsoring the new NFL expansion team, the Houston Texans. Continental is also expanding into an area that many experts feel is critical. According to Travel Marketing Dynamics CEO Richard Walsh, it’s time for airline advertising to tout the benefits of brand loyalty. That means tying in with other products that give you the benefits of loyalty to an airline. "That means being more creative with pricing and frequent-flyer miles," he says. "The advertising has to be in tune with what the consumer wants."

Continental has morphed into that kind of marketer by treating its frequent-flyer miles like currency and by tying in with partners that can afford them maximum marketing muscle. EBay has an exclusive deal with Continental that allows its frequent flyers to use miles to bid on ebay products, and lets ebay customers bid on Continental frequent flyer miles for their usage. According to Kevin Gallagher, Continental’s manager of sponsorship marketing, a new program will allow Continental miles to buy tickets for special events at Lincoln Center in New York as well.

"We’ve always sought ways to use frequent flyer miles as currency," Gallagher says. "It builds brand loyalty and it helps us attach several messages to our brand. We want the customer to equate us with the Yankees and their tradition of excellence, so we sponsor them. But when we can work with them to auction off a clinic for kids with the Yankees players, you really reach out to that customer. You allow a guy to take his kid to meet the Yankees, and you have that guy for life."