Air Travel Industry-How will Marketing Help Them Cope?

According to the Travel Industry Association (TIA), deep frustration among air travelers caused them to avoid an estimated 41 million trips over the past 12 months at a cost of more than $26 billion to the U.S. economy.
The aviation industry has never had it so bad, honestly. With American Airlines and others starting to charge by baggage, and with airlines even contemplating weight-based charge to airfare, it has never gotten so frustrating either. I am no lover of air travel—give me a clean seat in an aircraft that is on time and I will pretty much curl up in my uncomfortable state for up to 6 hours with just water to get me by [yeah, and we wonder how the ‘survivor’ contestants practice]. Long-distance travel, uhhh not so much. In anycase, much to the annoyance of the miles-guru at home, I am not part of any loyalty program and am therefore free to choose and ditch airlines at will. Nevertheless, the two main factors that stood out ensuring I repeated an airline remain the same across years—service, service, service!
All the supposedly newbie airlines had that going when they launched—United’s ‘Ted’ Delta’s ‘Song’ , JetBlue and more recently Virgin America. There was humor, a tad better service seat-to-seat and possibly a bit of fancyness to my journey [tv for every seat, ability to play games with random strangers in A23 and B44]. Food was still not a guarantee, and I suspect the ‘funny’ safety instructions gets jaded after the third time on the airline. But given equal costs, I would choose one of these rather than the legacy airlines.

But with factors that go beyond their control [airport issues, budget restrictions and cost-cutting measures], is service now more important than ever? With loyalty programs firmly tying customers to specific airlines, will service be crucial in moving customers away from competitors? Service is expensive , mind you. Will keep my eyes peeled for the next breakthrough marketing strategy in airline travel and service—till then, I will just desist all impulses to travel anywhere beyond a 10 mile radius.

Loyal to your Morning Fix?

MediaPost recently reported that McDonalds is entering the 'Coffee-wars', slated for a big stand-off in 2008. An excerpt here [MediaPost is a fantastic marketing and advertising resource online, free subscription btw]

"MCDONALD'S, WHICH TOOK SOME COFFEE ground from Starbucks and Dunkin' Donuts last year, has announced that it will install coffee bars with Starbucks-like baristas in 14,000 U.S. locations. Along with drip coffee, McDonald's will be serving lattes, cappuccinos, and frappes."

Starbucks made great headway in building loyalty for its brand--I know the second floor Peet's coffee compels some of the employees in my office to regularly take the elevator up to the third floor Starbucks-coffee machine, and less frequently, the opposite happens. However, loyalty erosion seems swift--Starbucks lost ground in loyalty according to the loyalty brand index just in the last year. They are starting to build their $1 coffee test [for the 'i am not paying 4$ for just coffee' people] and Dunkin Donuts is on the offensive, trying to reestablish its Americanness and its price-friendly coffee lineup.

McDonalds' jump into the fray, however, fails to impress me. They tried to jump into the 'salad' bandwagon and the 'fat-free dessert' bandwagon as well, with their USP falling back firmly on their $1 meal and burgers. However, its interesting that the likes of Starbucks is fraying its loyalty a bit. I would think building loyalty is now a lot more than just building cute cozy cafes, its a number of additional aspects to service. Has Starbucks deviated too much into the land of 'mocha-strawberry-blueberry-cinnamon' zone, losing out on the core coffee customers? Are elements like free wi-fi becoming more critical than Starbucks expects? I would think both--especially on service points like free-wifi. Starbucks has been busy building partnerships with T-Mobile for paid wifi for customers, and Apple for free itunes downloads--great! But what percentage of customers are T-Mobile and Apple users? If the mom-and-pop shop down the street offers free wi-fi with 2$ coffee and scone, is that a better alternative? I would think so.

What do you think?