Under new rivalry, airlines woo customers to 'go steady'
Selling the airlines to the American consumer isn't done the way it used to be. ''Under regulation, the competition was in service - who offered the best food, entertainment, comfort, and schedules,'' says William Gregory, editor of Aviation Week & Technology magazine. With government control over routes and fares, there was little else to compete in, he explains.Skip to next paragraph
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Since deregulation, airlines have had to behave more like retailers, airlines say.
''Corporate advertising has moved to retail advertising,'' says USAir's senior vice-president of marketing, Randall Malin. ''We aren't saying, 'We're USAir, we're great, fly us.' Now every ad done highlights schedules and price, instead of image.
''Last year we did a little corporate advertising,'' Malin said. ''Once we saw what kind of year it was going to be, we stopped.''
The last three years have seen intense competition for domestic airlines. With recession cutting back travel budgets, over capacity in many routes, and competition from new entrants, the key selling point is now price. If there is a lowest fare out there, competitor airlines are inclined to meet it.
''There is nothing more important to the masses than price. That's why you've seen the shift in advertising from service . . . and our price will be as good as anyone's,'' says W.G. Kaldahl, senior vice-president of airline planning for American Airlines.
Delta Airlines, which tried to hold off on participation in the various fare wars, finally took the plunge early last year. ''We put forth a campaign stating we would not be undersold. But in mid-1982 we restricted the amount of discount seats to improve yield.''
According to analysts, there was no avoiding it. Delta is back to ''meeting or beating all major fares,'' says Joseph Cooper, senior vice-president of marketing. ''As compared to service and comfort, price is foremost in the passenger's mind these days.''
Heavy discounting is going on in areas of overcapacity, such as transcontinental and north-south routes. But don't look for cut rates to states like Minnesota or Montana - ''no excess capacity has put pressure on fares there ,'' says David Kaplan, a Civil Aeronautics Board economist.
Many airlines involved in the most serious fare wars admit the rampant price slashing doesn't cover the cost of running those flights. But the alternative, they say, is empty seats.
Either fewer airlines flying those routes, or more passengers traveling, will end the wars, analysts and airline executives reason. But neither is happening. ''Carriers are hanging on more than they should in a down economy,'' says Neil Effman, senior vice-president of airline planning at Trans World Airlines.
Although price is the main marketing ingredient, service hasn't been completely thrown to the winds. Once the airlines have matched one another's prices, the marketing circle has to wind up at service again.
Delta and United advertise the comfort, roominess, and fuel efficiency of their new planes. TWA touts its Ambassador business class on transcontinental flights - almost as good as first class (you still get meals served on china) and fares only $10 to $30 more than coach. Muse Air, a relative newcomer, based in Dallas, is proud of its leather seats and no smoking throughout the plane.
But in the last year and a half, one marketing tool has taken off: the frequent-flier programs. With recession knocking the leisure traveler out of the picture, ''We've targeted the business traveler,'' says Charles Novak, spokesman for United Airlines. ''They've declined (in numbers), but they still take trips.''