"According to research, while 35 percent of passengers choose an airline on the basis of punctuality, pricing comes second at around 30 percent," says Hermann Behrens, CEO, Brand Union, Middle East.
"However, this also means that 35 percent of the decision making is influenced by other factors. This is where branding comes in," Behrens adds.
Behrens was talking about the global industry, not about India, and about both international and domestic airlines, not just domestic -and the 35 percent influence that the brand plays may not be half as important in India and domestic flights.
"For the traveling public, price is paramount in choosing a carrier. Due to the Internet and round-the-clock search capability, airfares are fully transparent to the public and travelers are choosing the lowest price option. Air travel is now a commodity business, and legacy carriers will have to adapt further to a low-cost/low-fare environment in order to survive. Even business travelers, who have been less price-sensitive, are resisting fare increases. The only premiums that travelers are willing to pay for are time-of-day and direct flights, not the brand," says a report.
Things are not made easier by the generations-old resistance to 'wasting' money and financial prudence. Nothing says it quite like this Maruti Suzuki commercial extolling the superior mileage of their cars.
The two major factors that influence choice of airline are punctuality and price.
As far as punctuality is concerned, IndiGo 'appropriated' the virtue with their commercial 'On time is a wonderful thing'.
In actual performance, for example, Go Air and IndiGo were the best, according to the latest data from DGCA. When it comes to cancellation of flights, Kingfisher's performance has been poor, even before the current crisis kicked in. In August 2011, for example, only Air India domestic had a record that was worse than Kingfishers, with IndiGo being the best performer.
As far as price is concerned, Kingfisher had never claimed (nor tried to be) the cheapest - and that might be working against the airline. For example, if one wanted to fly tomorrow to New Delhi from Mumbai, out of 127 flights that one could choose from, only six of Kingfisher's flights are available for less than Rs 10,000 (one way).
Kingfisher got Maslow's hierarchy of needs horribly wrong. "Maslow's hierarchy of needs is often portrayed in the shape of a pyramid, with the largest and most fundamental levels of needs at the bottom, and the need for self-actualization at the top," says Wikipedia.
In the case of airlines, especially when it comes to short-haul, domestic flights, the most fundamental needs are pricing and punctuality. The 'luxuries' such as great food, more comfortable seating, extra leg-room and in-flight entertainment come into play only AFTER these two needs are met. How much of a premium will a passenger pay for extra leg-room for a 90 minute flight? How often, in a domestic flight, can one see an entire movie?
Unlike the premium investments made in brands such as Nike and Apple, to name just two, one does not get an external 'badge' that one can show off after paying a premium on a Kingfisher Airlines flight. The badge is 'temporary' and 'transient', with a life and value limited to the time spent in the aircraft or at the lounge. With the cost consciousness of the Indian consumer that the Maruti Suzuki commercial demonstrates, the premium that one would attach to the brand becomes questionable.
IndiGo has successfully created a brand - after meeting the base requirements - and are in a position where they are the preferred choice in a commoditised low-cost carrier market.
Kingfisher's got the premium positioning correct. But they've got to realise that, in order to milk the positioning and command a premium, they need to get their act together on price, punctuality and cancellations. Once this is done, it's another task to get the premium right. How much of a premium will one pay for what, essentially, is a commodity product, for some extras, without the consumer feeling that he's wasting money?
The moment consumers question premiums that brands charge, brand custodians need to worry about the strength of their brand.What motivates consumers to pay a premium on Kingfisher today? Consumers will pay a premium when no seats are available on cheaper airlines - but that's a demand-supply equation, not a brand premium.
And when consumers pay a premium because they have to, it's not a transaction that makes them happy with the brand or the experience. To Indians, it's a loud reminder of the shortage economy pre-1992.
IndiGo and Go Air, too, may be faced with a diametrically opposite problem. While they've got their act right on price and punctuality, they need to start delivering beyond the basics - and moving towards a premiummess, even if it's at the low-cost end of the business. Give consumers reasons to fly these brands when all else is constant, that's their challenge. Stay low-cost and cheap and punctual, but, as Indian consumers keep demanding, give them more.
Published Date: Nov 14, 2011 12:59 PM | Updated Date: Dec 20, 2014 05:09 AM