Go flies in the face of cheap airline ads

Advertising in the budget airline sector is not exactly renowned for subtle understatement.

A butcher chopping meat, a print ad that shouts “Expensive Ba****ds!” or posters featuring the destination and the price alone are recent examples of the marketing tactics employed by budget operators easyJet and Ryanair.

The new TV campaign by

British Airways-backed discount airline Go, which launched this week, is by contrast surprisingly subtle. Executed by London agency HHCL & Partners, it is an extension of a print campaign which has been running since the airline’s launch in May last year.

Its arrival could signal the end of the cheap but cheerful advertising for the budget airline and herald the introduction of brand values to a sector which is used to fighting on price alone.

The new campaign has also raised easyJet’s hackles, which says it is suspicious of Go’s use of what it describes as “an expensive London advertising agency”.

Last year, easyJet filed a writ arguing that BA was abusing its dominant position by cross-subsidising Go. The matter has yet to come to court.

But Go “totally and utterly” rejects claims of cross-subsidy, saying that easyJet or Ryanair could go down the same marketing route, but have chosen not to.

David Magliano, Go’s marketing director, says: “It’s about having a better marketing sense, not about having a big backer.”

Go has played its cards close to its chest about how much it is spending on advertising. It insists that BA has given it a budget of only 10m a year to use before the airline’s planned breakeven date in 2001. This includes plane leasing, fuel and staffing and administrative costs, including the call centre.

Go refuses to be drawn on how much of that budget is spent on advertising, but targeting just three regions in its TV campaign (Carlton, LWT and Anglia) is, by BA’s standards, relatively modest.

However, the TV campaign is completely different to what you’d expect from a budget airline which is all about slashing prices and getting rid of costly frills.

It raises the question of whether discount operators should now be looking more seriously at marketing and branding as a competitive tool. As the budget airlines begin to compete with one another rather than the flag carriers, should they be looking at other ways to market themselves apart from price?

Go says that 45 per cent of travellers on its airline have not used a “no-frills” airline before, suggesting that it has opened up a new market of budget flyers.

“The low-cost market has been about price-only differentiation,” says Magliano. “But we can further differentiate in terms of brand, service and destinations.”

Budget operators such as AB Airlines, Virgin Express, Ryanair, easyJet and Debonair have successfully made money at the expense of flag carrying airlines such as British Airways. They do this by cutting out costs such as free meals and drinks and by setting up direct-selling operations which bypass travel agents.

Ryanair, the largest budget operator, recently announced record after tax profits of IR7.3m for the third quarter ended December 31.

But the budget market is to become more competitive, and operators will increasingly compete with each other as their networks expand.

Eli Abeles, managing director of airline consultants ABS, says: “The budget airlines have traditionally competed against the scheduled airlines. As they expand, they are starting to compete against each other, so they will need to develop other ways of competing. They could do this through marketing.”

Three weeks ago, Ryanair launched six new flights from London to European destinations, bringing its total number of destinations to 33. Last week, Go announced that it was flying to three destinations in Spain – Madrid, Malaga and Bilbao – and to Faro in Portugal, bringing its total number of routes to 12. Go is also planning to fly to Prague by the end of the year (MW February 25).

Last month, budget operator AB Airlines pulled its flights to Berlin and terminated its joint venture with Aer Lingus, blaming the competitive climate in the European aviation industry.

It is now exploring “a number of strategic relationships with other carriers”. Virgin, Debonair and easyJet are said to be in talks with the airline.

Against this background of intense competition, Go believes it can open up new markets and gain an edge on its rivals through marketing.

While the Go TV campaign still features prices and destinations, the ads also include bold graphics and a retro soundtrack. They target twenty- to thirtysomethings with some spare cash, who also like travelling to culturally rich destinations. In the case of its new route to Malaga, people who are visiting relatives who may have retired to southern Spain.

EasyJet, on the other hand, says it does not segment its market and is not aiming at a particular type of traveller. “When we started off, we thought we’d appeal to backpackers. But we’ve got many more types of people coming to us now, including business people,” says a spokesman for the company.

Privately-owned easyJet claimed a profit of 2.3m on turnover of 77m for the year ending September 1998 and spent 1.73m on advertising, including TV commercials. It prefers not to use an agency, thinking up attention-grabbing and sometimes bizarre tactical campaigns in-house – the butcher chopping up meat ad was a classic of the easyJet genre.

Ryanair uses London agency Griffin Bacal and spent close to 1m on advertising last year. However, marketing director Tim Jeans has said that the company is unlikely to go down the branding route because the proposition is all about price, a fact which is reflected in its advertising.

The fact that budget operators such as AB and easyJet are thought to be on the hunt for merger partners shows they are looking for ways to survive and prosper as the market becomes more competitive. Creating a sound marketing and branding strategy could be an effective way to achieve this.