Low-cost airlines look to protect their turf2 min read . Updated: 12 Jul 2009, 11:03 PM IST
Low-cost airlines look to protect their turf
Mumbai: As full-service domestic carriers move their focus to low-cost flights, original players in the low-fare segment such as SpiceJet Ltd and GoAirlines (India) Pvt. Ltd are embarking on rebranding exercises to retain their uniqueness in an industry where deep losses have forced every carrier to offer the same low prices and connectivity.
Delhi-based SpiceJet will begin its branding campaign this week, while carriers such as the Wadia group’s GoAirlines and IndiGo, run by InterGlobe Aviation Pvt. Ltd, are also rolling out campaigns of their own.
Promotional offers and special fares apart, SpiceJet is taking a new branding approach to help it stand out, and is talking about the airline’s unique brand offerings apart from the traditional “price point" or “promotional" advertising.
“We have reached a state where price is no longer an adequate differentiator for a low-fare airline. Therefore, you are compelled to look at avenues that will give your customer more than basics such as price, on-time performance, network and others," SpiceJet’s senior vice-president (marketing) Anish Srikrishna said.
The airline will spend between Rs3 crore and Rs5 crore to launch its new campaign, “Get more when you fly SpiceJet", in magazine and radio advertising.
“We are not unlearning or undoing our brand with an attempt to relaunch, we are merely innovating within our existing brand guidelines," he said. “Our ground and air personnel (will) adorn new formal grey attire and our logo will now reflect single deep blue. Our strength lies in our product offerings."
On 9 July, Mint reported that at least half of India’s domestic capacity has moved to low-fare and all-economy flights as the three big airlines—Air India, Jet Airways (India) Pvt. Ltd and Kingfisher Airlines Ltd—reduce their exposure to the full -service segment where margins are being squeezed by competition with discount airlines.
According to various airline executives, the fare difference between a full-service and low-fare carrier has narrowed, and with special and promotional schemes, fares look alike.
SpiceJet’s Srikrishna said his airline’s creative brand design cues the consumer on how to “get more" value when they fly.
“It positions the brand as one that delivers value beyond the price point. In addition to providing a safe, modern and young fleet with efficient, warm, friendly and on-time service, SpiceJet also listens to its consumers and offers experiences that they value. A positioning such as this cuts through the clutter in a market that is driven by price-based competition that has threatened to commoditize brands," Srikrishna said.
To start with, the brand campaign will be featured in the immediate issues of magazines that have coverage of the Budget presented in early July. The campaign highlights SpiceJet’s offerings, including complimentary supervision of unaccompanied minors; free of charge Web check-in; sale of hot tea and coffee in-flight; savings on return fares; waiver for sports kits and so on.
SpiceJet spends 3-5% of its turnover on advertising; its revenue for the fiscal year ended March was Rs1,689.44 crore. IndiGo was not available for comment.
A brand expert, however, said that airlines need to focus on their services more than anything else.
Ramanujam Sridhar, founder and chief executive officer of Integrated brand-comm Pvt. Ltd says airline travellers are led more by word of mouth than big budget ad campaigns. “Low-cost airlines such as Spice can invest in visibility and awareness; but clearly, the focus must be on service."