Does Air Asia need to be a brand?

Whenever I find a brand that matches its offerings to my requirements for value, I become not only a brand loyalist but also a brand ambassador. For years I was a Marco Polo member and sang the praises of Cathay Pacific to anyone who would listen. Then about 15 years ago I moved to Malaysia. Initially I flew Cathay, even though it meant going in the completely opposite direction to Hong Kong to pick up a connecting flight to Europe. But after a while, probably around the same time as I had run out of miles and therefore could no longer get an upgrade, I looked around for someone else to build a relationship with. The obvious choice was Singapore Airlines and I dabbled for a while but the hassle of changing flights in Changi and the extra 3 – 8 hours that added to my return trip meant this wasn’t really an option.

Next I tried BA for a while but they were in the process of pulling out of Malaysia so the only other option was Malaysian Airlines. I was reluctant, really reluctant for a number of reasons. MAS was horribly managed or rather mismanaged at the time. Safety was an issue, coffee shop talk was negative, morale was at an all time low, rumours of imminent sabotage were rife and the numbers suggested a severe crisis was due. But by then I had no choice as MAS was the only airline flying directly to London.

It was a gradual process but in the first year I flew a lot of domestic and international miles. I learnt the system and was able to get the best out of the airline which allowed me to experience all classes. It wasn’t so bad and by the end of the year, I was a Malaysia Airlines loyalist.

When AirAsia arrived I dismissed it as a little upstart, out of it’s league and destined to go the way of Pelangi Air and many others. The LCC model wasn’t something I believed in. Since when was travel no more than stuffing as many bodies as possible into the smallest plane that could fly the distance required? But a couple of years later I had to fly to Macau and the only flight that matched my schedule was an AirAsia flight. I swallowed my pride, apologised under my breath to the MAS 747 taxiing past the terminal and boarded the brand new Airbus, so crisp, clean and shiny compared to the 25 year old MAS Boeings and their tired interiors.

As I boarded, I was greeted by a smiling face and enthusiastic personalities that was contagious and impossible not to like, especially compared to the glum and tired looking MAS crews. Since that December day in 2007, I’ve become a regular AirAsia customer but every time I chose AirAsia, my choices are made based on price – RM680 for my wife and I to fly to Singapore and back compared to RM1710 on MAS and so on. I justify delays by reminding myself of the price and the savings. I reluctantly accept the fact that I have to pay (more and more) to check in a suitcase. I bite my tongue at the instructions that say I cannot take my own drinks on board. And this is key, I don’t have a relationship with AirAsia. And with the exception of 2 trips where I flew the night before a meeting, none of the trips have been time sensitive. To me it’s simply buying a commodity. Perhaps this is the way the business of flying is headed. Perhaps LCCs are the new legacy carriers and this is how all flying will be.

If this is the case, then fine. But how does a LCC like AirAsia build brand loyalty and the far more profitable repeat business critical to brand building? I’m fortunate in that I’ve not been subjected to one of the delays just about everyone I know has been subjected to when flying AirAsia. But when I do, I’ll immediately look at the other LCCs plying the same routes and I will switch in a heartbeat. As far as I am concerned, there is no brand loyalty with AirAsia. So essentially, the company model is based on the hope that there will be enough demand enough of the time on enough of the routes. If this is the case, then AirAsia doesn’t need to be a brand.

Perhaps this is enough for the aviation business to survive, and perhaps thrive. But judging by the LCCs in the US, I doubt it. What do you think?

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9 thoughts on “Does Air Asia need to be a brand?

  1. IMO a brand is a relationship. As in human relationships, some have greater depth and dimension than others. My relationship with my spouse is nothing like my relationship with my accountant, however both are relationships nonetheless. I interact with my spouse on a variety of levels and dimensions. My experience with my CPA is quite transactional and limited.

    It sounds like AirAsia has connected with consumers primarily on price. In times like these, that could be the basis for a healthy business; albeit, perhaps not as complex a brand as with others that connect with consumers on multiple fronts.

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    • Hi Michael

      Thanks for your comments. I agree in principle that a brand is a relationship. And at the heart of that relationship is retention because acquiring new customers on an ongoing basis, is an unsustainable model.

      But it is very hard to retain customers with a price driven model because there is always someone out there who can do it quicker, cheaper, smarter etc. The one element that cannot be duplicated by your competitors is your relationship with your customers. Building that relationship takes time, effort and money.

      I think you are right, in times like these, it is a sound business model. But when the economic environment improves, and other entrepreneurs want to start airlines and they have access to newer, more efficient planes and cheaper money, will Air Asia survive using its existing model? And if it doesn’t, is it a brand?

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  2. Someone said to me brand = trust and it looks like that’s where AirAsia is heading. They have been busy engaging with their fans (ala Facebook, Twitter, blogs, etc.) and associating with even bigger brands (F1 really takes the cap here) which IMO increased it’s brand value dramatically. If that’s so then somebody has been busy calculating the value of creaming the AirAsia brand from other avenues apart from ticket sales.

    In the end the market will dictate if AirAsia should stick to the commodity angle or play the brand card. Perhaps they may even win at both.

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    • Hi Hugh

      Thanks for your comment. BTW, I really like your site.

      I agree, AA does an excellent job of engaging consumers. However, I don’t know if they are fans because I associate fans with sports. Furthermore, I wouldn’t consider myself a fan of AA but I suspect I am spending more than many of their followers on FB etc.

      And that is the key to building a brand, the way you look after your existing customers. For instance, if a consumer is spending RM10,000 a year with AA, should he/she expect to be treated differently to other consumers who book a year in advance, getting the cheapest ticket to fly back to Penang once a year for CNY?

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  3. Quite true. This is a problem for every brand offering low cost products and services. Low cost offerings make the consumers very conscious of the many sacrifices they endure to avail the service, hence gaining loyalty is near impossible.

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  4. Does anyone know? Why they choose AirAsia name?
    I mean the derivation of Airasia. Issit because of simple spelling? Made people easy to remembered?
    Hope someone can explain to me. Why they choose “AirAsia” words.
    Thanks..

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  5. AirAsia name was not something created by their ceo. AirAsia was an original name inherit from DRB-Hicom, the previous owner.

    And i would humbly suggest that AirAsia build brand loyalty based on low pricing strategy. The more frequent you fly (the more chance you are a customer with them) automatically you will be brand loyal as you know the price is the main attraction unless there is another competitor which comes out with a better business model.

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    • Adrian, many thanks for your response.

      I didn’t know that about the name!

      A low pricing strategy (if that isn’t an oxymoron!) is a dangerous approach. Having said that, it is still attractive, primarily because of its simplicity. But as I said it is dangerous because the loyalty of the customer have been bought and if AirAsia can buy that loyalty on the price of a ticket then so can another more efficient carrier.

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