San Pedro: Dual-brand strategy

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By Arnel San Pedro

Check and Balance

Monday, December 16, 2013


IN A bid to exploit the full potential of the Asian market and maintain market share, legacy carriers have been entering into a dual-brand strategy pioneered by the Qantas Airlines with its Jetstar model that had been highly successful in the Asia Pacific region.

Long-haul carriers without a low-cost subsidiary will play a minority role in the aviation industry as the pairing of airlines gobble up emerging passenger market. Qantas segmented its product between leisure and full service markets, a marketing strategy that can be adopted by the existing local carriers in the Clark International Airport. For example, Tigerair Philippines can serve the passengers of Emirates Airlines or Qatar Airways who will take a connecting flight to local destinations in the country. This is called “feeder flights” which is slightly different from a dual-brand scheme that requires pairing of a full service airline and a low-cost carrier.

The Qantas-Jetstar model utilizes higher seating configurations and a reduced meal services in its leisure routes in Asia Pacific region, the same move taken by other successful low-cost carriers around Asia such as Tiger Air Singapore, Cebu Pacific, Air Asia and so forth. Although one can buy “instant noodles” or packed meals which are costly.

Airlines-pairing had been adopted in Asia notably by: Singapore Airlines and Tiger Airways, Malaysia Airlines and Firefly, Philippine Airlines and AirPhil Xpress, Korean Air and Jin Air, Emirates and FlyDubai, Garuda Indonesia and Citilink and so on. The growth in airline industry is apparently anchored at the lower end of the market and in the Philippines the Overseas Filipino Workers (OFWs) and their families comprise the bulk of the market as they tend to take advantage of the all-time low-fares offered by competing low-cost carriers.

Just recently, Virgin Australia and Tigerair also adopted the dual-brand strategy and started to coordinate new routes in the Land Down Under upping the ante against the Qantas-Jetstar pairing. The key ingredients to a successful dual-brand strategy are the airlines’ product, quality of service and brand.

Last Friday, Tigerair Philippines announced the Clark-Davao route in an effort to maximize its presence in the Clark airport. Tigerair Philippines also plans to launch new flights to Korea and Japan by early 2014, according to Tigerair President and CEO Olive Ramos. “Tigerair will maximize their presence in Clark and as a hub for its flights because of its ideal location. Unlike the Ninoy Aquino International Airport in Metro Manila, it is not as busy and congested.”

Currently, Tigerair serves the routes to Hong Kong, Singapore and Bangkok with domestic flights to Kalibo via Clark Airport.

The Clark International Airport Corporation and the Department of Tourism support the expansion projects of Tigerair Philippines because it will effectively promote leisure flights to Central and Northern Luzon.

Ramos noted that with “these flights, travellers from the Northern and Central Luzon no longer need to drive all the way to the Ninoy Aquino International Airport to take their flights to these destinations.”

TigerAir Philippines continues to pounce on new destinations from Clark airport and the market had been responding positively as the low-cost carrier makes “traveling more affordable to Filipinos while providing them with a quality airline with excellent standards of safety, security, and reliability.”

Published in the Sun.Star Pampanga newspaper on December 16, 2013.

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