What Brands Can Learn From Pan Am-The Airline And The Show

Bond, James Bond, would only fly on Pan Am. That’s what a cool airline it was. Once the world’s leading airline, with scores of innovations to its credit, it’s been interesting to watch the new ABC drama, “Pan Am” and ponder the recipe that made this airline’s experience so magical. Or more specifically, from my marketer’s point of view, what made Pan Am such an incredibly strong brand.

For those too young to remember, flying used to be fun and, at times, downright glamorous. In the movie “Catch Me If You Can,” Leonardo DiCaprio plays Frank Abagnale, a fast-talking teen who cons his way into a number of professional situations – doctor, lawyer, and a pilot for Pan Am. The kid is after excitement and, at the time, the airline industry was exciting. And, Pan Am, with its stellar fleet of “Clipper” ships, its international routes, it’s stewardesses in black high heels and tailored uniforms, and it’s dashing pilots, was the most exciting of all. It was, in fact, the very symbol of the romance of flight. The people who worked for the airline loved what they did. They had a passion for flying, and their passion was infectious. Service was a high priority. Passengers were well cared for. And, yes, these passengers actually got dressed up to fly. It was that special.

Then, it became not so special. The airline business began to get big and complicated and messy for a lot of reasons, not the least of which were deregulation and the high price of oil. Dollars were squeezed out of the system. Pennies were squeezed out of the system, and passengers started to get squeezed. Management lost sight of the fact that keeping customers happy was critical to success and the people who worked for the airlines, in return, began to lose their passion for flying and the industry in general. And therein is the answer, to the branding question, anyway.

To put it bluntly, a brand is as a brand does. And the most critical aspect of what a service brand does is, well, duh, provide service. To a large part, the success of airlines, hotels and restaurants, retailers, and other service-oriented categories is dependent on the people on the front lines. People are the branding applications, so to speak, that create the relevantly differentiated experience. They’re the points of touch most critical to bringing the brand’s purpose to life. In the case Pan Am, it wasn’t the seats in the planes, the advertising, or even the iconic blue logo that made it what it was. These were relative commodities. It was the people and their love of what they did for a living. More than this, as is true of every super service brand, management empowered those on the front lines to do the right thing to preserve customer satisfaction. While I know it was part of the drama, on the first episode of “Pan Am,” a middle manager arranges to have a helicopter meet a flight crew’s purser on the top of the (where else?) Pan Am building in New York City when it becomes apparent this was the only way she’d be able to get to her flight on time. No red tape. No questions asked. Her job was to ensure the well being of those on board the aircraft and whatever it took to solve the problem was the modus operandi.

Pan Am understood – until it didn’t – that its employees were the magic ingredient that made it as good as it was. The people who worked for Pan Am delivered best in class because they understood what the brand stood for in the minds of consumers and they had a genuine passion for bringing best in class to life. When they joined the company they knew what they were signing up for. It was when Pan Am lost sight of the fact that its employees were what differentiated its brand from every other in the field that it lost its way. For companies in search of a lesson learned, it’s tough to make a brand fly when you’re reduced to competing on commodities. While, “Pan Am,” the new television show is, of course, all about conjuring up only the glamour that was air travel in the nineteen sixties, it does hit on something real: A brand is as a brand does. And, the real Pan Am did it up swell.

Royal Brunei Outlines New Short-Haul Strategy

Royal Brunei Airlines  is adding Airbus A320s to its fleet next year and has confirmed that its new business strategy is to focus on short-haul rather than long-haul operations.

The carrier “is planning to add at least one extra A320 to the short-haul fleet in March-May 2012 to ensure the airline can offer a more consistent schedule and level of service on the regional network,” it says. RBA has no A320s on order, which means it is likely to be in the market to lease the aircraft.

Royal Brunei also says it remains committed to taking delivery of Boeing 787s, the first of which will come in 2013. The carrier has five 787-8s on order, according to the Ascend database.

The airline also has six Boeing 777s, which are leased from Singapore Airlines (SIA), but it no longer needs so many 777s because from Oct. 30, it will stop flying to Auckland, Brisbane, Perth and Ho Chi Minh City.

Executives at the airline says they are trying to persuade SIA to let RBA break the lease and return some of the 777s. The airline says extensive research it conducted earlier this year shows it “must realign its goals and focus once again on becoming a regional hub with strategic connectivity—a return to its roots. This means focusing on regional traffic and maintaining only the long-haul routes which are consistent with the airline’s long-term objectives.”

Royal Brunei says it is abandoning some long-haul routes because the research showed that only about 9% of the traffic on long-haul routes originates in Brunei or ends in Brunei. “This 9% are the passengers that contribute to Brunei’s local economy—the rest simply transit Brunei on their way somewhere else and offer little in the way of economic activity,” RBA says.

“In these circumstances, it has become impossible to justify the continuation of the route network in its entirety, where RBA is effectively providing subsidies to over 90% of the traffic, while creating little or no economic value either for the airline or the country.”

By comparison, about 75% of all passengers on its regional routes are based in or are visiting Brunei. “It is clear why RBA must focus on the regional market,” says RBA. “To continue to serve the routes that have been suspended, would cost RBA and Brunei far more than the economic benefit the airline or country would receive in return for keeping these routes open.”

The carrier admits there are arguments that the long-haul services should continue because the belly-hold space on the aircraft is important for transporting goods to and from Brunei.

But Royal Brunei says there is no rule that says freight requires a nonstop service. It says, “Daily connections via regional hubs should be more than enough to supply Brunei with all of the goods we currently enjoy.”

Air China Announced to Join Sustainable Aviation Fuel Users Group (SAFUG )

Recently, Air China officially announced to become a member of Sustainable Aviation Fuel Users Group (SAFUG). Being the first Chinese airline of the Group, Air China will be in line with other members to support the commercial use of lower carbon renewable fuels, derived from environmentally and socially sustainable sources, to achieve a broader aim of achieving carbon-neutral growth across the industry. 

Established in 2008, SAFUG is a world-leading working group on aviation biofuel, dedicated to support the development and commercialization of sustainable and renewable aviation fuel. By joining the Group, Air China will participate in the industry-leading study on aviation biofuel, and share its existing experience in the aviation biofuel flight test. 

In recent years, Air China consistently pursues sustainable development, and considers environmental protection as an important social responsibility. The Company decisions, day-to-day operations and other relevant activities are guided on the principles of energy efficiency and emission reduction. Furthermore, Air China also endeavors to minimize its environmental impact by adopting new aircraft and flight technologies. In early 2011, Air China published the Corporate Environmental Policy, which commits to pursue effective environmental management throughout all business practices, and actively participate in industrial and international cooperation, to encourage the relevant low-carbon studies and solutions of aviation industry, such as aviation biofuel. 

To fulfill this commitment, Air China will work jointly with Boeing, Petro China, UOP and other key stakeholders to implement the first biofuel flight in China late this year. Significantly, the biofuel is produced from locally grown plants. A transpacific biofuel flight is also expected to be implemented afterwards. These demonstration flights are considered to assist in generating excitement and support from corporate, regulatory and relevant entities, and will be a great path to future development. 

Air China’s efforts to enhance its participation in aviation biofuel development is an important driver towards a sustainable and clean future.

Significant’ Cracks Found on Boeing 767 Prompt FAA to Expand Jet Checks

United Continental Holdings, Delta Air Lines, American Airlines and other U.S. carriers may need to inspect their Boeing 767s twice as often after one operator found “significant crack sizes” had developed sooner than expected.

Airlines should inspect the twin-engine jets after 2,000 flight cycles or 6,000 flight hours, double the current requirement, the Federal Aviation Administration said in a proposal to be published in the Federal Register next week. The rule may affect 417 planes in the U.S., the agency estimated.

The FAA is proposing heightened scrutiny of the wing skin after cracks as large as a half-inch (1.3 centimeters) were found on either side of a fastener hole on a plane that had 18,900 flight cycles and 89,500 total flight hours. The 767 is a wide-body plane typically used on international flights.

“We support the rule proposed by FAA,” Julie O’Donnell, a spokeswoman for Chicago-based Boeing, wrote in an e-mailed message. The change “essentially would mandate the recommendations that Boeing first made to operators in a service bulletin in 2009 and revised in March 2011.”

Delta is one of the biggest operators of 767s, with 92 of the jets, some of which are an average of 19.7 years old, according to the Atlanta-based carrier’s most recent annual report. Fort Worth, Texas-based American has 73 of the planes, some of them 24 years old; Chicago-based United has 61 of the planes, some 18.3 years old.

Delta, United Continental

Delta wasn’t the unnamed airline whose 767 had the cracks, spokeswoman Ashley Black wrote in an e-mail. The company is in compliance with current FAA inspection requirements and will follow any changes that the agency makes, she said.

United Continental also complies with FAA directives and will continue to do so, said Megan McCarthy, a spokeswoman for the carrier.

“We’re watching it closely,” she said.

Spokesmen for the other carriers didn’t immediately comment on the proposed regulation.

Earlier this year, Boeing called for more inspections on older 737 narrow-body jets after a Southwest Airlines plane split open midflight, prompting an emergency landing. Two people were injured.

Metal fatigue cracks on the so-called 737 Classic weren’t forecast to occur until “much later,” after 60,000 cycles of takeoffs and landings, Boeing said in April. The Southwest jet that ripped open on an April 1 flight had flown 39,781 cycles.

Investigators said the Southwest plane’s fissure was caused by weakened fasteners in joints along the crown of the jet, and Dallas-based Southwest later found cracks on five more 737s. Boeing developed repair plans for the aircraft.

(Via BLOOMBERG)

UK Airlines denounce airports’ ‘virtual hub’

Ever since the coalition government ruled out allowing new runways at Heathrow, Gatwick or Stansted airports, ministers have been accused by the aviation industry of lacking a credible policy to deal with rising long-term demand for air travel.

In theory, the ambitious proposal to integrate Heathrow and Gatwick through a high-speed rail link could form the solution, but the industry has quickly denounced the idea.

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Ministers have been told by business that a new aviation policy was badly needed as part of efforts to kick-start the flagging economy. A report published last month said the UK was at serious risk of missing out on trade with emerging markets worth £14bn during the next decade because Heathrow was operating at full capacity and could not expand.

These findings about the capacity crunch in the south-east explain why ministers are coming under pressure to speed up their policymaking. They previously promised an aviation framework by 2013.

Ministers may now be focusing their minds, but on Friday airlines and airport operators lined up to express grave misgivings about the interest in creating a “virtual hub” between Heathrow and Gatwick.

British Airways said linking Heathrow and Gatwick “does absolutely nothing to address the ever more pressing issue of the south-east’s need to have more airport capacity in order for the UK to remain globally competitive”.

BAA, Heathrow’s owner, said the idea “faces insurmountable technical, operational, political and financial challenges, and would take many years to deliver”. A rail industry executive, who declined to be named, said it would be difficult to build a high-speed network between Heathrow and Gatwick.

The government is holding to its view that it will not allow the construction of more runways at Heathrow, Gatwick or Stansted.

However, ministers think additional airport capacity may be found by linking Heathrow and Gatwick. Following the construction of a high-speed rail link between the two airports, the idea would be for Gatwick to focus on short and medium haul flights to and from Europe.

Some of these Gatwick flights could then provide important feeder traffic to Heathrow, which would focus on long-haul flights.

Gatwick has some room to accommodate extra flights because it is operating at 80 per cent capacity. In theory, more capacity could be found if Ryanair and EasyJet, the low-cost airlines, ended their operations at Gatwick and concentrated on Stansted and other airports, such as Luton.

Ryanair and EasyJet might choose to sell their take off and landing slots at Gatwick if they increased in value because of a high-speed rail link with Heathrow.

But Michael O’Leary, Ryanair’s chief executive, said there was “no way of moving the budget airlines out of Gatwick”. He added: “There won’t be a high-speed rail link between Heathrow and Gatwick in my lifetime. The cost of it would be prohibitive.”

EasyJet, which dismissed the idea of linking Heathrow and Gatwick, said: “EasyJet will fight any attempt to force us out of Gatwick all the way.”

(Via FINANCIAL TIMES)

Airbus: South Pacific Carriers Will Need 736 Aircraft Worth $98 Billion

Demand Seen For Larger, More Efficient Aircraft Over The Next 20 Years

According to Airbus’ latest Global Market Forecast, between 2011 and 2030, carriers in Australia, New Zealand and the Pacific Islands region will require 736 new passenger and freighter aircraft (above 100 seats) valued at $98 billion. The region’s close links to emerging economies are the main contributor to traffic growth with business and tourism set to grow steadily. Urbanization and a doubling in the number of mega cities from two to five in 2030 and a bigger middle class base will also spur traffic growth. Low Cost Carriers will continue to expand and their market share of traffic between the region and Asia is forecast to increase to some 35 per cent by 2030. 

Airbus forecasts a regional growth rate of 4.8 per cent per year up to 2030, matching the world average, but outstripping all other developed aviation markets such as North America (2.5 per cent, domestic) and Western Europe (3.5 per cent, inter regional).

The region’s requirement for 736 new passenger and freighter aircraft includes 468 single aisles, 211 twin aisles, and 57 very large aircraft (VLA). Of these, 731 will be passenger aircraft, broken down as some 380 for growth, and 349 for replacing older models with more fuel efficient ones. In 20 years, the region’s passenger fleet will almost double from some 400 aircraft today to over 780 by 2030.

John Leahy, Chief Operating Officer Customers says, “More people want to fly. Load-factors will continue to rise. Add to this higher fuel costs and infrastructure which cannot keep pace with growing demand, then larger more fuel efficient aircraft are the only sensible choice, and this is confirmed by our latest Global Market Forecast.The long term market appetite for high capacity, high productivity aircraft like the A380 remains healthy".

Globally, in the next 20 years, Asia Pacific including China and India will be at the center of the world’s strongest demand for aircraft (34 per cent) and by 2030, the largest share of traffic (33 per cent). This concentration of demand, together with its historical links to Western markets will drive business and tourism in the region. Traffic growth between Australia, New Zealand and the Pacific Island’s region and China (6.2 per cent), India (5.6 per cent) and the rest of Asia (5.7 per cent) is forecast to be significantly quicker than the world average 4.8 per cent. 

Interest Growing In 777 Freighter Conversion

Boeing is already speaking to potential customers about a future program for Boeing 777 passenger-to-freighter conversions, but when this program will be launched depends on 777 residual values coming down.

Senior VP-Commercial Aviation Services Lou Mancini declines comment on when the 777 freighter conversion program will launch, but says, generally, there is a 20-year rule governing when it becomes suitable to make a freighter conversion program available. If this rule is applied to the 777, then it means Boeing would launch a 777 freighter program in 2014-15, in time to have the first aircraft completed in 2017, he says.

But the key to when Boeing will launch a 777 passenger-to-freighter conversion program is the residual value of the 777 passenger aircraft and, at this stage, there is no sign that 777 residual values are falling, says Mancini.

Boeing also needs to secure a sizable launch customer to kickstart the program. The aircraft maker has been approached by potential customers, and Boeing has done the designs for the conversion and analysis to show what the operating costs and performance of such a freighter would be, says Mancini.

Once Boeing is ready to launch the program, there also is a strong possibility that a maintenance, repair and overhaul (MRO) company in Asia may be chosen to do the work.

Mancini says Boeing Shanghai, Taikoo Aircraft Engineering Co. in Xiamen and Singapore Technologies Aerospace in Singapore would be contenders. Boeing is a shareholder in the two Chinese facilities. Taeco already performs 747-400 passenger-to-freighter conversions. Boeing Shanghai has no passenger-to-freighter conversion programs, but Boeing was looking to have Boeing 767 passenger-to-freighter conversions done there before the 2008 global economic downturn put an end to that plan.

ST Aero could be well-positioned to win the deal, because it has a close relationship with Boeing. It already does 767 and MD-11 passenger-to-freighter conversions. ST Aero, which is a government-linked company, could also make use of national carrier Singapore Airlines to help secure the deal. SIA is one of the largest 777 operators in the world. The Southeast Asian nation also is a logistics hub, so it has close business ties with cargo companies, such as FedEx, which could be a future customer for 777 converted freighters. But Boeing Shanghai's advantages are that Boeing is a major shareholder in this MRO and that China is a bigger market than Singapore.

(Via AVIATION WEEK)