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NEW: AdAsia 05 - Day 2: Some insights into marketing low-cost airlines

23-November-2005
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NEW: AdAsia 05 - Day 2: Some insights into marketing low-cost airlines

SINGAPORE: The second day of AdAsia 05 here took off smoothly with a lively discussion on whether marketing can make a difference to low-cost airlines. Holding stage was the Richard Branson of Asia – Tony Fernandes, Group CEO, Air Asia, Malaysia – and Ken Ryan, CEO of Singapore-headquartered Jetstar Asia.

Both agreed that marketing did make a difference, but Fernandes was clear that for low-cost airlines, price was the key, perhaps even more important than marketing. “For our kind of airlines, the price, or fare, has to be the lowest possible. Price is all, it can make or break us. Aviation is a complicated business, and we have to be absolutely disciplined to ensure that we can offer the lowest fares.

” “The objective of running an airline is to take people from point A to point B. However, a majority of people in a country like Malaysia and many Asian countries may not have flown before. It is these potential customers we try to get,” Fernandes explained about the target market.

Agreeing with him, Ryan said, “And that is marketing – grabbing this untapped customer bank. We not only have to entice customers but have to ensure that they come back.”

Fernandes came up with an interesting, and at the same time, humorous insight. “Low fares can actually help people overcome fears of flying. At the height of the SARS epidemic, when people were scared to fly outside their cities or countries, all I had to do was provide rock bottom fares. That temptation was enough to overcome any SARS induced hesitation about flying among my Malaysian customers,” he said.

Both Fernandes and Ryan agreed that beyond pricing, advertising did play a role in ensuring a viable customer base for low-cost airlines. Said Fernandes, “Air Asia came up with a very aggressive ad with three girls chosen from among our cabin crew. The copy said ‘Twice the fun at half the price!’ It was a take-off from the Singapore girl campaign of Singapore Airlines, and it worked for us in this market.”

Fernandes pointed out that low-cost carriers had to consciously cut out on frills like fancy tickets and meals provided by international airlines, which are primarily state-owned. “This should not be seen as a shortcoming. There are ways of making up for the lack of such frills. It is all about providing an in-flight experience. Here, it is our creativity that matters,” he maintained.

So, how does a low-cost carrier provide the experience? Said Fernandes, “Instead of re-running the same movie umpteen number of times, we involve our passengers in creating entertainment. If there are any passengers who can sing, we get them to sing during the flight! Regular airlines never do that. So, we provide an experience involving our passengers. They will always remember this experience because this is out-of-the-box entertainment.”

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