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I discovered this outrageously funny video about airline fees. The point to note is that this video is predicting airline fees in “the year 2007″! And true enough, by the end of 2007, and throughout 2008, we started seeing the rise in airline fees for everything from checking-in a second bag, to a cup of water (which I think qualifies for a human right violation). When ancillary revenues are pursued independently of brand strategy, here’s what happens. Enjoy!

If you aren’t following SimpliFlying on Twitter yet, you may do so here: http://twitter.com/simpliflying . Do subscribe to SimpliFlying by email or RSS, if you haven’t already done so as well!

 

Lately, I’ve been talking a lot about how airlines can use Web 2.0 tools to connect with their customers. This is a re-post of an article first published on the NewMediaChatter website, where the author re-counted his experience with JetBlue and Southwest Airlines’ Twitter “agents” – and both of these airlines are at the forefront of using this technology. It’s a very interesting story, and offers many lessons to not just airlines, but also other companies looking to tap on this medium. Let’s discuss what you think JetBlue did wrong or Southwest did right.

Special thanks to David Peck, for the permission to re-post this article on SimpliFlying.

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Jet Blue, Swing and a Miss.. Southwest Airlines Hits A Twitter Homerun

I am back from SXSW. I had a blast. It was one of the best events I have ever been to. So many familiar faces, so many new faces. Im already looking forward to next year. So, let me tell you about my flight back  from Austin last night.

I arrived at the airport 90 minutes early to bard my Jet Blue flight …

 

Dear Readers,

Here’s a piece of good news I wanted to share with you. I just found out that SimpliFlying is ranked 2nd for the most number of followers on Twitter for the “airlines” category! And this, without having mentioned that I’m on Twitter on this website before. So, thanks again for all your support. If you aren’t following SimpliFlying on Twitter yet, you may do so here: http://twitter.com/simpliflying . Do subscribe to SimpliFlying by email or RSS, if you haven’t already done so as well!

Keep flying. SimpliFlying.
Shashank

 

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Recently, the Centre for Asia-Pacific Aviation (CAPA) published a report which concluded that the “full-service airline model break down in the new-world order”.

“Worldwide, the number of passengers travelling on First or Business class tickets fell by 16.7% in Jan-2009, a further substantial fall from Dec-2008 levels, which were 13.3% down on the year.â€

That means that legacy airlines, which made a majority of their money from premium passengers, are struggling, even as low-cost carriers see greater traffic from people downgrading and new people taking to the skies.
What does the future full service airline model look like?
Here’s my prediction.
It will consist of airlines charging for providing value added services, rather than those un-bundling their products. Moreover, customer service will become a key brand distinction for the full-service airline, as prices would generally be competitive and so would most of the in-flight products too. The savvy traveler of the future will not only hunt the lowest prices, but be loyal to the airline that treats him well. Lastly and most importantly, employees of the full service airline will be part of the family, and share the love with customers at every touch point too (up to 16 …

 

Image via Wikipedia

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I read an article about Tony Fernandes, the CEO of AirAsia, in The Economist today that got me thinking. Thinking about the last few articles I’ve written about United Airlines, RyanAir and Southwest Airlines – on how they make money off their customers – what what works and what doesn’t.

There’re a lot of airlines in the US and Europe can learn from Tony Fernandes and AirAsia (+ Azran and AirAsiaX). Here’s how the article in The Economist ended.
“Mr Fernandes says that he came to the industry with no preconceptions, but found it rigidly compartmentalized and dysfunctional. He wanted AirAsia to reflect his own unstuffy, open and cheerful personality. He is rarely seen without his baseball cap, open-neck shirt and jeans, and he is proud that the firm’s lack of hierarchy (very unusual in Asia) means anyone can rise to do anyone else’s job. AirAsia employs pilots who started out as baggage handlers and stewards; for his part, …

 

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I was reading through a popular airline forum this morning and was shocked the read the story of a United Airlines frequent flier, who was extremely frustrated by “hidden fees” the airline had imposed on him, and was desperately seeking advice on how to resolve the matter without further aggravation. Here’s Phil’s story (reproduced with permission):
“I purchased a ticket to Amsterdam last weekend with my miles. I booked over the internet and paid a $100.00 booking fee, along with the taxes on the flight.

I had to change my plans because of my mother’s surgery this week. So I called United and they said that I can do one of two things, hold my ticket without returning my miles -OR- pay an additional $150 to have my miles returned to my account.

Oh yeah, just to get the miles put back into my account and forget the hell about all of this, it’s an addition $150.00. I don’t get it, those are mine! And all they have to do is …

 

Image via Wikipedia

I wrote about value-addition to bring in revenues yesterday. The best value addition to a customer’s brand experience is emotional. And the best value addition brings in revenues in more ways than one – like through sustained customer loyalty. After all, Southwest has been one of the most profitable airlines in the world for a long time.

A reader wrote to me recently that he was disappointed that I’ve never flown Southwest. Well, I am too! They didn’t fly from Boston all the time I lived there.

But why do I regret it? Because I feel I’ve missed out on the fun of flying with Southwest. Here’s what I feel puts Southwest in a class of its own. Just like Singapore Airlines “brings back the romance of travel”, I think Southwest “brings back the fun of travel” (and you can quote me on that!).

Enjoy the candid in-flight videos!

Here’s another……

 

Continuing with the ancillary revenues special this March, I’d like to explore the issue whether ancillary revenues are good for the airline brand, or detrimental. We all know they’re good for the balance sheet, but what about the brand? To answer this question, let me segment ancillary revenues in two bands – charging for value addition, and un-bundling current product and services.
Charging the passenger for value-addition
A comment on the hotly debated article I wrote on RyanAir’s competition for charging passengers got me thinking. Here’s what Shyrose had to say:
“RyanAir should link up with the local taxi companies of the detination airports and agree a deal with them, whereby flyers can book their taxi on the plane so it’s ready and waiting for them the other side. Taxi companies give Ryannair a referral fee, and Ryanair will be positioned as offering greater value service for customers.”
And I think Shyrose is bang-on-target. Customers don’t mind paying for additional services they value. And this is especially true when the offer is in-sync with the brand expectation. There are ample examples of such value addition. Travel insurance and car rental are popular ones. The intelligent …

 

A picture speaks a thousand words, isn’t it? I’ve included two here, this Sunday, and I think they speak more than 2,000 words when put together. The first graphic shows the bad state of the airline industry, and the second shows what traditional forms of marketing mean.

The good thing is that social media combines the benefit of all of the traditional marketing aspects, and may very well be what puts airlines back in the black. I’ve discussed this in much greater detail in my case studies on airlines using Web 2.0. What do you think? Have a great Sunday!

 

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[caption id="" align="alignright" width="320" caption="Source: RyanAir"][/caption]

It seems like RyanAir folks read SimpliFlying! Just when we’re having an ancillary revenues special this month, they’re giving us all the fodder to write about!

The airline has launched a competition where anyone in Europe can suggest ideas by email to competition@ryanair.com on how RyanAir can make more money off their customers! The best idea wins €1,000.

Some of the wackiest ideas are already stated on RyanAir’s website:

Charging for toilet paper – with O’Leary’s face on it,
Charging €2.50 to read the safety cards,
Charging €1 to use oxygen masks,
Charging €25 to use the emergency exit,
Charging €50 for bikini clad Cabin Crew.

An airline which laughs at itself
These days, companies, especially large, international ones that dare to laugh at themselves are a rarity. And an airline that can do that earns my respect. Others in those ranks? I’d say Southwest, JetBlue, Virgin America, Kulula.com, Indigo and AirAsia. Ironically, no legacy carriers made to this list. Do you know of any more?
A “cheap”, but authentic brand
Alright, many of you woul classify this RyanAir move as “cheap”. But isn’t RyanAir a cheap airline for the …