It has been said that airliners are one of the toughest businesses to manage. Profits are modest during boom times, largely dismal in the bad times. This high-profile industry also comes with a list of long standing challenges, such as strict aviation regulations, high fixed costs, high operating costs, powerful labour unions, international security issues and volatile oil prices; not to mention bad press about bankruptcies, strikes and accidents.

Set against such a harsh backdrop, it is no wonder that airliners often strive to set themselves apart, if for anything, to disassociate themselves from the unkind realities of the industry. So while branding strives to mould perceptions, it also serves as a point of differentiation, which is essential in a saturated market. Singapore Airlines, for instance, is perceived to be best-in-class for customer service while Southwest Airlines is seen to be cost-efficient and fun. In the world of Web 2.0, however, airliners’ branding and marketing claims are likely to be challenged. That is why Shashank Nigam, CEO of SimpliFlying, an airline brand consultancy, believes that airliners must up their ante. He tells Knowledge@SMU why airliners must go beyond conventional branding methods.

Nigam: The airline industry is unique - it is cyclical in nature, incurs high-fixed costs, there are uncertainties due to heavy dependency on other fluctuating factors like oil prices. Also, the length of engagement that airlines have with their customers is unparalleled. Compared to big brands like Coke or Pepsi - you can drink a soda quickly, but airlines have you captive for anywhere from one to twenty hours. This is a great chance to change passenger perceptions. If an airline delivers what it promises, interacts with its customers consistently, in a responsible manner over time, and continues to innovate, people will continue to vote for it with their wallets, their respect and their affection. So an ideal branding model for the airlines would take into account both the realities of the business and the nature of the industry.

K@SMU: You’ve come up with a “6X” branding model for airliners. Can you tell us what this model addresses specifically?

Nigam: I review the branding of an airline in six factors. The first three focuses on customer engagement, which is very much in the airline’s control. This is the process from brand awareness to preference and purchase, to the post-purchase brand interactions. Brand expectation provides a projection of what the airline is about and the experience it will deliver. Brand experience aligns the product, service and corporate operations to deliver the expectations. Brand expression builds familiarity over time through engagement. The latter three deal with aspects unique to the airline industry. A crucial aspect of the “6X” model is brand externalities: Airlines have to deal with many issues beyond their control, from pilot unions and government regulations to events like 9/11. The fact is that every airline faces the same hurdles. It is how they react to those hurdles that will set them apart from the competition. Brand extensibility is about expanding the brand’s presence with a strong, consistent set of core values. More than anything else, it is this consistency that builds trust among customers. Finally, a brand that possesses the X factor is in a league of its own. These are nuances that ensure that the airline stands out from the competition and could even lead to a cult status among its customers.

K@SMU: Do you think that the brand initiatives that have worked for airliners till today may no longer be relevant?

Nigam: I think most established airlines have done a good job at branding by 1990s standards. However, they are still not utilising several modern tools available to them that could take airline branding to a new plane. Web 2.0 is the future of brands. Branding of a company, more so an airline company is no longer a one-way process; it has become a two-way street. So I see Web 2.0 as an enabler in that it enables an airline brand to interact with their customer in an efficient, effective, low-cost and real-time manner. Web 2.0 enables this participative approach to branding which can be very powerful. In the current scenario, a brand is not what you say it is, rather, it is what your customers say it is. Currently, the airline industry is in a flux. That is when new ideas can make or break a company, especially when it is something as long term as their branding.

K@SMU: Which are the airliners that have already started tapping on Web 2.0 channels? 

Nigam: AirAsia has a blog on which absolutely anyone can write a post - customers, employees and everyone else. JetBlue Airways has been tweeting on Twitter, a perfect example of real-time interaction with customers. Virgin Atlantic, despite being an established and reputed player in the market, has an active Facebook page with over 10,000 fans. This illustrates that even large, well known airlines are reinventing their branding methods.

K@SMU: How might Web 2.0 work for the premium or corporate travellers – those who travel frequently in first or business class – customers who might not necessarily be attuned with such new media?

Nigam: Premium passengers must be targeted using mediums they use. How about offering an iPhone app for check-in or even a Blackberry "change of flight" application? Anyone travelling in business class is bound to have either one of these smart phone devices. Leading airlines like Cathay Pacific, Lufthansa and Qantas have developed such apps, available free-of-charge to frequent fliers. Singapore Airline has not.

K@SMU: What more should airliners be doing on the Web 2.0 platform and what value can Web 2.0 bring to airliners, other than making them look technologically relevant or savvy?

Nigam: I think appearing suave should be last on the priority list. Airlines should look to add real value to customers and potential customers by interacting with them in real-time through Web 2.0 channels like Twitter. For example, Southwest Airlines empowers its fans to spread the good word by sharing with them videos and pictures (like the rapping flight attendant). Alaska Air recently used Twitter to send real-time flight delay updates at Anchorage airport due to a volcanic eruption. JetBlue answers questions from curious travellers regularly. All these acts can bring lots of value to passengers.

K@SMU: Airliners are going through tough times, first with rising oil prices and then with the financial crisis. The nature of the industry also makes them extremely conscious of the bottom-line. How can Web 2.0 initiatives serve the bottom-line?

Nigam: Web 2.0 initiatives are said to be at least 8 times more efficient than traditional advertising means. That means instead of spending $80,000 on a billboard advertisement to launch a new route, and airline would need to spend $10,000 on a Twitter campaign to get the same number of people buying tickets. The "cost per acquisition" is much lower than traditional media and this works even better in the recession.

K@SMU: So how should airliners track the ROI on their Web 2.0 initiatives?

Nigam: There is the traditional ROI, which can be tracked using instruments such as cost per acquisition, but for Web 2.0, return on engagement (ROE) metrics need to be determined as well. These would include goals like 200 members per week, or 200 comments on a discussion per week, depending what an initiative aims to achieve.

K@SMU: Is branding via Web 2.0 part of a larger CRM strategy that airliners should be undertaking, or should it be seen as a separate strategy or function? Also, have you examples of successful Web 2.0-based CRM campaigns to share?

Nigam: To work well in the long term, Web 2.0 has to be an integral part of the brand strategy, which should include CRM as well. Traditionally, airlines have lagged behind other industries when it comes to CRM. Ritz Carlton would know the type of pillow you prefer, no matter which city you're in and they'd provide that to you. But no matter how much I fly an airline, I still need to tell them what drink I'd prefer upon boarding the plane. Web 2.0 offers airlines the opportunity to catch up with the rest of the world when it comes to CRM. Imagine - you tweet about losing your bags and vent out your frustration; how about the next time you fly this airline and the ticket agent offers you free lounge access? This might be a reality very soon and Alaska Air is currently piloting such a project. These kinds of projects are at a very nascent stage right now.

K@SMU: What are some of the common organisational challenges faced in the implementation of Web 2.0 initiatives?

Nigam: Airliners tend to operate in silos. As such, it's difficult to implement a holistic Web 2.0 strategy which requires involvement of people from in-flight services, corporate communications, marketing, customer service and more departments. A person or team needs to be given ownership of the project, so that they can cut across traditional boundaries. Airlines are also control freaks. Press conferences are well rehearsed and annual meetings are staged rather than held. Web 2.0 brings a level of spontaneity and informational transparency that airline executives may not be used to. This is the biggest hurdle - the mindset. They need to realise that in this new social media enabled world, discussions about them will go on, regardless of whether or not they choose to participate. It would serve them well if they participate and guide these discussions rather than snub them because they can't control them.

K@SMU: What are some questions that organisations should ask themselves, to assess their readiness for utilising such channels?

Nigam: Just two questions. If they don't do it now, then when should they start? Also, what's the cost of waiting?

Shashank Nigam graduated from Singapore Management University’s (SMU) School of Information Systems (SIS) in 2007. He started SimpliFlying following a brief stint at a Boston-based IT firm to pursue his love of airlines, branding and IT.