Question: are airlines still marketable brands, or is airline travel simply a commodity, with price being the only determinant to a buyer (choosing a route)?

Obviously, in FT, many are elites who are "brand loyal," and thus have a reason to stay with a primary carrier, even if there is a price disadvantage. But elites are likely a minority on any given flight.

Though much of this may be stating the obvious, I believe that the airlines have allowed the commoditization of their product, and pursuing (post dereg) a pricing strategy have simply raced to the bottom - yet many continue to try and protect their "brands" while continuing to cut costs. I guess the question is can a "brand strategy" work in such an environment, or is attempting to protect/grow a brand simply a waste?

IMHO, airlines are mostly still brands rather than commodities.

The top airlines for service quality - BA, CX, QF, SQ and the like (to take a few at random) - are still strong brands and spend a lot of money investing both in the main brand and the sub-brands of the different classes they offer.

And in most countries, there is still a natural tendency for people of that country to fly "their" airline. So the nationality of the airline is an inevitable part of its branding, however archaic that concept may be.

There are some markets where this is much less marked, of course, and where purchasing is driven much more by pure price. But that's far from universal.

US Domestic is or has become almost entirely a commodity market although Song, SouthWest and perhaps "Hooters" are the exception.

Internationally, Branding is very much alive and well, note the image conjured up by the Singapore Girl, the airlines like Emerites, Brunei, the planned use of customized A380's by airlines seeking differentiation. I am Asia-Centric in my views because thats where I work. The Euro market may be more like the US.
VietNam Airlines has worked very hard to rebrand themselves from the Ilyushins and Tupelovs that were held together with bubble gum, baling wire and ducttape 10 years ago to the fairly slick service provided today.

In First Class on United Airlines 10 years ago (example - JFK - NRT) you were served caviar and vodka, huge shrimp coctail, individual meals prepared from the hot-cart at your elbow, Johnny Walker Blue and on and on. Today SQ Raffles Class is as good or better, certainly as comfortable and if you use Book the Cook, the food is far superior. All part of creating and maintaining the Brand.
bb

Also B6 has a very loyal brand following. With the exception of B6, WN and elite flyers (read FTers) domestic air travel is a complete commodity in the US. My main route is WAS-FLL which as 6 airlines offering non-stop service; DCA-US, NK
BWI-WN, FL, US (on Sat and maybe Sun)
IAD-B6, UA (Ted)
For me which airline I choose is a complete function of flight times and price. When I head down in about a week I am flying down on US from DCA and returning on WN to BWI because two 1 ways is cheaper and the times work out better.

I will admit to having a bit of loyalty to WN because I am just a couple of credits short of a free roundtrip.

Most of the "top airlines" trade on the stock market at little over book value which is typical of a commoditised business. They are typically unable to generate returns higher than their cost of capital over a cycle.

However it is clear that they have some "brand value" as passengers like me will pay a premium to fly on the "top airlines" over either American or LCCs.

So I'm sitting on the fence!

WN is somehow not part of the air commodity market? They're the leading reason why air travel is becoming a commodity(at least in the us). Their whole business plan screams commodity.

>are airlines still marketable brands, or is airline travel simply a commodity, with price being the only determinant to a buyer (choosing a route)?

I would say for domestic US carriers it's been a race to the bottom, with price being the only determinant factor. I think for most travellers who might fly once or twice a year to visit grandma, points programs have little value, once they realize they need a dozen round trips to grandma's house just to get enough points to redeem for one ticket. (A ticket that they have to book 10 months in advance.)

For international one might argue there is some differentiation, but in over the past few years I've flown transatlantic on AC, BA and LH, with virtually no difference in steerage, other than a terribly important (to me) marginal increase in leg room on AC.

Cheers,
Geoff Glave
Vancouver, Canada

I think there is developing a two tiered system where Business and First class travel is a brand and economy class travel is much more of a commodity.

For non-discounted carriers I would still classify them as brands. But for those discounted ones (i.e. jet blue, southwest, Tiger, etc) would tend to lean more towards the commodity.

I think jetBlue has tried to build a positive brand following, and even though they are part of the commodity that is air travel, they have done a good job building their brand.

This is an interesting discussion, especially with the comment that the branding is restricted to premium classes, and economy being a commodity.

In my opinion, some of the legacy US carriers are still holding on to the concept of branding the economy too - witness AA's MRTC experiment, and UA's E+ offering.

There is more than one current thread in the UA forum about E+, and what the reactions of FTers to its value/removal might be.

Edited to add that this view is still US-centric. My other flying experiences have been in India, where inspite of the influx of LCCs, there is still a preservation of branding at the economy level. Whether this will go the way of the US market will be seen in a couple of years I guess.

For me personaly, it is mostly a commodity with some brand loyality involved. If the price is similar, I would probably go for the brand. If the price is much cheaper, I would go for commodity.

Unfortunently, I would have to agree with the idea that premium class is brand loyal and economy class is a commodity.