• by Karl Greenberg , July 17, 2008

Fuel costs and labor issues are central to American Airlines, and Delta Air Lines posting $1 billion-plus losses for the quarter. Other carriers are likely to post losses as well.

So it may be a bit of a stretch to consider their problems from the perspective of brand positioning. After all, fuel is fuel--and it costs an arm and a leg regardless of which airline's wing tank gets filled. And nearly across the board, travelers are unhappy with the advent of baggage fees, impersonal, delayed and less service in general. But to Greensboro, N.C.-based marketing firm Stealing Share, the airline industry's woes present an opportunity.

In its report on American, Continental, Delta, Northwest, Southwest and United, the firm argues that the carriers' marketing messages are largely the same--promoting things that every airline provides, and are not relevant to travelers. According to the firm, only Southwest and Continental have messages that stand out by acknowledging that travelers are being treated badly (in the case of Continental) and that what they really want are cheap flights (Southwest).

"What really surprised us, when we began looking at it, is how much the advertising is alike," says Michael Van Ausdeln, senior brand strategist at the firm. "They are all still taking about what we call 'table stakes,' [basically, services that every airline must strive to have, such as timely flights and curbside check-in]. It demonstrates that their strategy is about survival."

He says that since the airlines market the basic benefits of flying, they are "creating a blur in the minds of travelers, so passengers choose solely on price and convenience instead of the strongest emotional currents running in the market."

The firm says Continental and Southwest have bucked the trend to some extent with marketing aligned with a meaningful current running through the market--and positioned it against the competition. Continental grew earnings 50% last year, and was one of the few carriers to actually post a net income in the fourth quarter. Although it lost $80 million in the first quarter this year, it garnered a 7% increase in passenger miles traveled.

Continental's strategy is to position itself versus the competition by agreeing with the passenger that other airlines are no longer making flying a pleasurable experience. One ad appeals to travelers getting less and less of everything with ads showing flight attendants grabbing meals, pillows and blankets from people, even making one guy spit out a peanut he had just put in his mouth.

Southwest, which has had yearly profit increases and a 30% increase from 2006 to 2007, was the only carrier of the ones the firm studied that did not post a loss in first-quarter 2008, marking Southwest's 68th straight profitable quarter. The approach is pitching low fares as a key to freedom, with the tag: "You are now free to move about the country."

The firm uses Northwest as a poster child for marketing that helps the market leader--American--by touting benefits that aren't specific to Northwest, like curbside checking, printing boarding passes with its "Now You're Flying Smart" campaign. Yes, Northwest has these services, but, says Vanausdeln, "unfortunately for Northwest, so does its competition."

Vanausdeln suggests that the carriers are stuck because even beyond this year's fuel crises, and the long shadow of 9/11, "they haven't had to change their industry in several decades, really. Now they are almost playing defense: they talk about category benefits because they want to protect their market share; they really don't step outside the box. But sometimes it's in times of economic hardship that it is the best time to do that."