Talking Tourism: Low-cost airlines and how low prices are not enough to retain customer loyalty

The rise of low-cost carriers (LCCs) in South Africa mirrors a trend in the airline industry worldwide towards low fares and aggressive branding to attract passengers. The success of LCC brands, in a realm where others have failed, is indicative of a new type of irreverent marketing that is influenced greatly by the buying trends of a changing, mobile consumer. For years, South Africa’s local airline industry has been dominated by well-known, state-controlled South African Airways (SAA). In the years since the country embraced democracy in 1994, we have seen a massive expansion in South African air travel and many new entrants now challenge SAA’s dominion in the skies. A new breed of young, hip LCC brands have arrived and have made deep cuts into the market share held by bigger, more established companies like British Airways (BA) and SAA.

Today, South Africa has four low-cost airlines that run daily domestic flights between most of the country’s major cities, including Cape Town. Mango Airlines, 1time and kulula have all been providing this service for a number years, and last week we saw a new player step onto the scene – an airline by the name of Velvet Sky that is now operating flights between Johannesburg and Durban, and Johannesburg and Cape Town.

Low-cost carriers have been very successful, particularly in the business and domestic tourism markets; however, the service experience on these flights often leaves much to be desired. Staff, clients and members of Cape Town Tourism have been subject to substantial delays and inconsistent service from almost all LCCs over the last few months. This kind of inconsistency and unreliability seems to have become the norm. As travellers on these airlines, we understand that “no frills” means that you basically get a seat on the plane to take you from point A to point B, and that if you require anything over and above the seat, you often pay for it; but that does not justify an inferior flight experience.

Low-cost flight offerings in South Africa have been taken up considerably well and play a very important role in the tourism industry. The introduction of a new low-cost airline this month proves that there is a market to be serviced. In Cape Town Tourism’s summer survey series (December 2010 to February 2011) we noted a trend of rising domestic tourism – an encouraging and sustainable growth area. Cape Town International Airport reported an 8% growth rate in January 2011 (compared to January 2010) and a 10.05% growth rate in February 2011 (compared to February 2010). Much of this growth can be directly attributed to the increase in stock availability by LCCs. Rising costs linked to fuel prices, tough economic times and climate change will continue to impact on aviation, making competition more vigorous. Surely, in these times, airlines must realise what makes their customers tick. LCCs can take advantage of changing trends to carve out an even stronger presence in the market and can contribute significantly to the growth in tourism if they are smart and switched on to the customer.

We ask that low-cost airlines consider that their reputations go hand-in-hand with that of the tourism destination in which they operate – nationally and abroad. In a world where consumers are spoiled for choice, airlines cannot become complacent about service excellence and customer communication, expecting low prices to be enough to retain customer loyalty. Consumers are now more fickle than ever and while price remains the most important driver of buying decisions for many, we do not forgive arrogance regarding poor service and continued unexplained delays. When things do go wrong, which they tend to do from time to time, management, please don’t leave your team in the lurch: Step out of your office and deal with us. We are, after all, your most important brand ambassadors and can build or break your brand. Brand is reflected in the behaviour of people, it is a promise realised. Your low rates, cheeky jokes and clever strap lines are not enough to keep us flying with you.

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