Yesterday's news that ESPN is getting into the cell phone service business by reselling leased space from the Sprint network has me thinking about airlines. The idea of a major brand moving in to craft an experience out of a service is an important idea.
Airlines can't seem to craft a compelling brand or an experience out of transportation. Last week I was one of the masses who flew for the (American) holiday. I flew on two different major airlines and the experience was equally awful on both. They were so similar that they were completely interchangeable. Major airlines have a problem they cannot solve. They themselves are not able to craft a compelling differentiated reason to select their airline over another. Everything about the travel experience is virtually identical from one airline to another with only a few exceptions.
Airlines have taught customers to shop by lowest possible fare. This they have learned is untenable in a world of increasing costs. What works for Wal-Mart cannot work for airlines. Wal-mart drives prices lower each year forcing vendors to cut costs by sourcing goods from cheaper and cheaper labor markets around the world. Americans have been taught to expect lower and lower prices for the goods and services they desire. Hence the success of the so called "discount airlines." The problem is the airlines cannot "me too" the Wal-Mart approach. Without significant disruptive technology advances airlines must face escalating cost structures.
American Airlines currently advertises that "we know why you fly." Which is their attempt to say we understand our customers and why the need/want to fly. Apparently this is all talk because there is nothing even hinted at that they are doing differently with this "new" knowledge they have. What these ads really say is "Na Na, we know you have to fly and you will do it on our terms for what we want to charge you."
If airlines really knew us, their customers, they would know that we love super brands like ESPN, Disney, NASCAR, CNBC, Electronic Arts, American Idol, etc. I have wondered before what a Disney Airline would look like. They have been successful in bringing their Disney Magic to the cruise industry how about the airline business. Airlines need to partner with super brands that can craft compelling experiences within the transportation process.
Just like ESPN riding on the Sprint wireless network, super brands can ride on airline platforms to create cobranded experiences that will give customers reasons to choose an airline other than lowest fare. The results - Stronger brands for partners and higher margins and profits for airlines.
Remember Eastern Airlines? They used to be the "official airline" of Walt Disney World. In those days (the mid 70s) that meant little more than advertising slogans and in flight napkins that had both the Eastern and WDW logos on them. Ohhh.
What if Delta brought you AirDisney an airline within an airline that flew out of hubs near Disney properties? Themed airplanes, gate areas, "cast member" flight attendants, in-flight Disney entertainment, truly family friendly amenities and other Disney magic touches would appeal to vacationing families headed for Disney parks and transform the act of getting from point A to D into something compelling that Disney fans would line up for.
What if United brought you AirCNBC that featured free live video feeds of CNBC programming and other custom branded business/investment experiences/content to appeal to business travelers. "Free" WiFi, Cell service, printers, tech support, etc. things that would make business people more productive during their travel time. Business travelers wouldn't mind paying a premium fare if it enabled them to be more productive en route.
You get the idea. Airlines should partner with one or more brands that could add an experiential aspect to their basic air travel services. Customers would see a real difference between air carriers and real reasons to choose and pay different fares for different travel experiences.