Brands Taking a Nosedive

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Date: May 3, 2017
Category: Business, Media

When bad service meets social media, brands crash fast, which is all too visible right now with US airlines. United is desperately trying to pull out of a PR death spiral that started in March and shows no sign of letting up, but American is also in trouble. How can airlines maintain a positive brand image when the shoddy reality of your product is up on Facebook for all to see? Truth is, the main problem in this $664 billion market isn’t razor-thin margins (jet fuel prices have halved); it’s lack of competition: only four airlines control 80% of US domestic air travel. During the mid-80s, Virgin Atlantic shook the industry with a rock ’n’ roll alternative to the chilly sterility offered by trans-Atlantic services. Now it’s the turn of other disruptors. With a promise to fly US passengers to Europe for as little as $65 from regional airports that carry much smaller passenger processing fees, Norwegian Airlines is undercutting prices and offering a far more pleasant airport experience. Meanwhile, others are betting that speed trumps price, at least for a good-sized swathe of air travelers, and a return to supersonic passenger service is promised for 2018. These tactics are regarded as precarious investment vehicles for now—much depends on just how fed up US air travelers actually are with the status quo. With these and future airline challengers, brands will need to genuinely reflect a user-friendly product. But, with insouciant incumbents revealed as willing to treat customers like cattle, there’s a low bar for now. Is your company living up to its brand promise, or is it vulnerable to the harsh spotlight of social media, with a challenger just waiting to cash in on the damage?