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The current economic situation has created a bit of a marketing conundrum for the airlines. How do you get people to spend their hard-earned money on leisure travel when so many are concerned about their future financial security?
Well, two carriers have taken two very different approaches. One has chosen to “work” the trend and appeal to the idea of security, while the other has chosen to go against the grain by expanding service and targeting specific markets and travelers in “small-town America.”
JetBlue has launched a program that provides refunds for travelers who pay for airfare, but are then laid off from their jobs before the flight:
“JetBlue launched the program not because customers were asking for refunds, but because the airline has noticed that passengers are waiting to the last minute to buy tickets, a sign of nervousness about their finances.” (from Wall Street Journal)
We’ve seen similar moves made in other industries. The “Hyundai Assurance Program” allows you to “return your vehicle and walk away from your loan obligation” if you purchase a car and are then laid off.
While JetBlue, Hyundai, and others draw on people’s uneasiness about the future, Allegiant Air is going the other way. Based on their operating margin, Allegiant was the most profitable domestic carrier in 2008, and they’re going into 2009 with expansion on their minds. They’ve increased service to/from a range of smaller cities throughout the country:
“Maurice Gallagher Jr., Allegiant’s chief executive, says he’s convinced that despite the uncertain economy, small-town Americans will continue to buy the discretionary getaways that are Allegiant’s specialty. ‘We’re just not seeing the deterioration [in demand] that other people are seeing,’ he says.” (from Wall Street Journal)
So, what do folks in smaller towns like Peoria and Elmira, as well as big cities like Chicago and New York, want from their airlines? Financial security, or the promise of a quick getaway? Let us know which (if either) recession marketing plan appeals to you.
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It’s not nervousness about finances that makes me wait to buy an airline ticket, it’s the fact I’ve been “punished” in recent months for booking earlier rather than later. For example, on my last flight fares went down almost $150 a month after I bought my ticket so I would have been better off waiting. Sure you run the risk that fares won’t go down, but lately it seems they’ve decreased more and more as seats remain unfilled.
I too, recently bought a ticket at Alaska Airlines, and when the price dropped, I called to as for the discount. They had some arcane rule that it had to happen within two days. There was no discount for my expensive early ticket.
At this time, I would wait longer for a lower price.
And last, but not least, its easy to make refunds at – or at least limit – losses. Occasionally the country will intervene in their finances to limit the flow of their hard-earned money.