Mark Ritson on branding: Airlines count cost of one-track mind

They say that things come in threes. We should, therefore, not be surprised that Silverjet has now followed rival airlines Eos and MAXjet into financial difficulties. Things aren't looking good for the British business-class airline. A £12.6m funding deal appears to have fallen through and shares have been suspended.

It is all a long way from the launch of these three business-class airlines only a matter of months ago. The chance to focus on one particular market segment with a very specific positioning made a lot of sense. This was certainly the viewpoint of Deloitte partner and airline expert Graham Pickett, who believed that Silverjet, in particular, had a lot of potential. 'It is a hassle-free experience. When you go to Silverjet, you go into a terminal dedicated to Silverjet passengers. The only aggro you have is getting off your backside to go and sit on an aircraft,' he said.

The benefits of a clear positioning for a single target segment were also apparent in the cut-through achieved in the three airlines' ads. Eos' print executions showed a couple attending a packed tennis game, except for their section - empty save for a dedicated waiter. The strapline was 'By removing the crowds, Eos Airlines has completely transformed transatlantic travel. No lines, no waiting, no stress.' If only it had added: 'And no chance of staying in business', the ad would have been spot-on.

While rising fuel prices may be responsible for the immediate downfall of the three airlines, the real reason for their demise was targeting. While a single positioning to one target segment is attractive from an execution point of view, the reality is that you need to target multiple segments to make serious money. The economic advantages of multiple target segments almost always outweigh the marketing benefits of a tight, singular positioning to just one group.

Two segments increase the overall size of the market potential you can attract. They also provide a hedge against economic fluctuations. When the economy is good, for example, most business schools make their money from executive education with fat, happy corporations. When the economy slows, they switch focus and make most of their money from the individual MBA candidates recently released by their employers with a big exit payment and time on their hands.

This dual targeting strategy is particularly appealing to airlines because, thanks to aircraft construction, it is remarkably easy to target two distinct segments and service both separately. In economy, punters can enjoy their free mini-bottle of Sangria, while, up front, the pampered masses lie back sipping their Dom Perignon. Both are oblivious of each other and the fact that the airline needs both types of consumer to survive.

The only viable model for airline success is to target economy and business passengers. If you don't believe me, consider all the big boys who continue to operate a mixture of both offerings on most of their flights. Still don't believe me? Look at all the low-cost carriers such as Britain's easyJet, Australia's Virgin Blue and the US' Jet Blue. Each started with a specialist focus on the economy segment, but are now devoting increasing proportions of their planes to business-class seats and targeting premium travellers.

They say things come in threes. Maybe, in marketing, what we really mean is that segments should always come in twos.

- Mark Ritson is an associate professor of marketing and consultant to some of the world's leading brands

30 SECONDS ON ... BUSINESS-CLASS ONLY AIRLINES

- MAXjet introduced its fleet of Boeing 767s in November 2005.

- Operating out of London Stansted, it initially flew between London and New York and later added flights to Las Vegas and Los Angeles.

- It ceased operating and filed for Chapter 11 bankruptcy protection on 24 December last year after efforts to raise more capital had been unsuccessful.

- Eos also launched in 2005, with a fleet of Boeing 757s, flying between New York's JFK airport and London Stansted.

- It sought bankruptcy protection at the end of last month and stopped all flights after failing to win investment.

- Silverjet launched in January 2007, flying from London's Luton Airport to New York and Dubai.

- Shares in the airline have been suspended after funds it had secured as part of a loan agreement failed to arrive in its bank accounts.

Discussion

Before commenting please read our rules for commenting on articles.

If you see a comment you find offensive, you can flag it as inappropriate. In the top right-hand corner of an individual comment, you will see 'flag as inappropriate'. Clicking this prompts us to review the comment. For further information see our rules for commenting on articles.

comments powered by Disqus
Brand Republic Jobs

subscribe now

Latest

Oasis #springasmile digital campaign gets people doing good deeds
Coca-Cola: 'Don't approach bloggers with a fait accompli'
Tesco CMO Matt Atkinson: 'It is so important not to stereotype mothers'
McDonald's gives Ronald a new look ahead of global 'Fun times' social media push
In pictures: BrewDog opens first craft beer shop BottleDog for 'beer aficionados'
Facebook ad revenue leaps $1bn as it invests in targeting
Malteser or Maltesers? Mars takes Hershey trademark dispute to court
Apple Q2 profits top $10bn as iPhone sales soar
Lynx tells men not to leave love to fate
HBO captures awkwardness of watching sex scenes with parents
Primark to open first US stores with Boston chosen as flagship location
Marketing spend on the up but a reality check is needed before celebrating
Top 10 ads of the week: Jackpotjoy and BT Broadband fend off Kevin Bacon
Lidl beats Tesco to 10m Facebook fans
Center Parcs ad banned for encouraging parents to take kids out of school
Coca-Cola, Cadbury and Amazon named top brands for targeting youth market
Leaked document shows Nokia to be rebranded as Microsoft Mobile
Nike lays-off hardware staff in move that casts doubt on future of FuelBand
Greenpeace says save the bees or humans will die
What brands need to know about changes to VAT and online downloads in 2015
Jimmy Savile victims urged to claim compensation in new ad campaign
UKIP launches biggest  ad campaign and stirs up 'racist' accusations
Apple boss Tim Cook provides voiceover on ad touting firm's renewed green commitments
John Lewis walks consumers through its history to celebrate 150 years of business
Waitrose boosts content strategy with 'Weekend Kitchen with Waitrose' C4 tie-up
Hottest virals: Cute puppies star in Pedigree ad, plus Idris Elba and Fruyo
Amnesty International burns candles to illuminate new hope
Tom of Finland's 'homoerotic' drawings made into stamps
Toyota achieves the impossible by calming angry Roman drivers
YouTube reveals user habits to appeal to 'older' marketers