20 December 2009

Rational Thinking - An Oxymoron Concept For Airlines

The conventional wisdom says that brand accounts for something. Indeed there is a signicant amount of balance sheet value attached to brands.

Not just for today but in the future and definitely in the past. Yet brands have a habit of going away fast.

Hands up those who remember PC Travel, Preview Travel and Pointcast? Three major brands with some reference to Travel in early days of the web. Or more interestingly great consumer brands like Sam Goody, Tower Records and Photomat. Brands that are now consigned to the scrapheap of history.

My point here is that airlines have always tried to get you to make irrational decisions about their products.

Have a read of Gerry McGovern's blog this week.

While he makes two incorrect assertions - Ryanair is not yet charging for toilets and it is not the world's largest single branded airline yet (that honor goes to Southwest), he makes the point that rational people will pay for the extras and put up with the crap from Ryanair. They wont do that for airlines that promise more charge more and fail to deliver the greater "value". this is akin to the David Ogilvy's classic ad about the Rolls Royce loud clock. In that instance a RR owner is going to make a lot more noise about the clock not working than a Pinto Owner worrying about his door opening.

Southwest set expectations low and over delivered for years. Ryanair sets expectations low and consistently delivers the fundementals - IE low cost transportation.

Is that rational behavior? I don't know - just ask the people who complain about no seat assignments when they paid the average fare of 32 Euros that FR charges.

Think about it.


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