Posted on May 23, 2008, 9:33 am, by Shashank Nigam
The airline industry is one in which there are a lot of externalities – situations beyond the control of individual airlines, which they have to deal with. These may include events such as 9/11, weather conditions, pilot union trouble or even the bankruptcy of a competitor. Though on the face of it, these may all seem to bring trouble, but if leveraged well, these externalities can lift the airline brand in a number of ways. This is because almost always, a number of airlines face a similar macro-situation simultaneously, but it is those who deal with it well who come out triumphant.
Here are three examples of how airlines around the world have been resilient in the face of externalities.
Olympics in Beijing? Let’s send the A380 there. To capitalize on the increased travel demand to Beijing during the Olympics, Singapore Airlines recently announced that they will be flying the A380 to Beijing during this period. What a perfect example of dexterity. Not only will SIA be able to showcase their premium product to a large number of travelers (who’re ever so happy to be on the A380), they’re charging more for those tickets too. Perfect win-win situation. Competition died? Let’s service their routes. Alaska Air started new routes to Hawaii from Seattle after Aloha Airlines collapsed earlier this year. Not only were they able to service existing demand. Another win-win situation. Passengers stranded by competition? Let’s help them out. SilverJet offered seats to stranded Eos passengers between London and New York once the latter ceased operations. Cathay Pacific offered seats to tons of students heading to London once Oasis Hong Kong went out of business. Both these airlines appeared as “rescuers†in the eyes of the passengers. What better way to acquire customer loyalty, that too from those who were going to the competition earlier.
Response to externalities is a crucial, but often overlooked, strategy that can be utilized by airlines to win the hearts and minds of their passengers. These three customer examples demonstrate that.
Please feel free to share your own experiences in the comments section, where you’ve encountered dexterity on airlines’ part.
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[...] The importance of resilience – three airline case studies [...]
[...] “honor” of being the fittest, and the service often notches up a bit. Not only that, remaining carriers often come to the rescue of the stranded passengers of the bankrupted airlines, as they see a ripe opportunity for acquiring new [...]
[...] of Etihad noted that “forward bookings (for the Games) are already ahead of our expectations.†Singapore Airlines is sending its flagship A380 to Beijing from July 31 to Aug 9 “to cater for increased demand in the lead-up to the start of the Oympic [...]