TAM takes an innovative approach to attract Brazil’s emerging middle class

Rising disposable income in emerging economies such as the BRICs and the Next-11 enables the rapidly growing middle classes in these countries to start travelling by air, often for the first time (see this graph for the link between GDP and the average number of flights per capita). For example recent IATA estimates project there will be 3.3 billion air travellers by 2014, up by 800 million from the 2.5 billion passengers in 2009, with China accounting for more than a quarter of this growth.

According to Brazilian airline TAM, the middle class in Brazil has grown three times as fast as the overall population since 2002, and in 2011 roughly 6 million people are expected to move from Class C (yearly income of USD700 to 3,000) to Class B in 2011, earning over USD 6,000 a year. TAM furthermore estimates that 10.7 million Brazilians are set to hit the skies for the first time in 2011, 8.7 million of whom belong to the ‘emerging classes’ C and D (source: TAM/Sparksheet).

Reaching first-time flyers
Research by TAM shows, however, that 53 percent of the Brazilian middle class has never travelled by air, while 58 percent has travelled more than 8 hours by bus, since a lot of people in Brazil work outside their home states. In an effort to make air travel more accessible to the overall Brazilian population, increase the volume of passengers at off-peak hours, and to counter growing competition from low-cost airlines such as GOL and Azul, TAM has taken an innovative approach to reach this new segment.

The airline sells tickets via low-end retail chain Casas Bahia, will open 200 ‘TAM Viagens’ travel stores in smaller cities across Brazil, offers new ways to pay for tickets, provides advice to first-time flyers and created ads (for example on pizza boxes) that include price and payment plans to show that travelling with TAM is affordable (tagline: “Você vai e vai de TAM” / “You go and go by TAM”).
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Delta opens SKY360 lounges at events to let visitors sample its product

As people are bombarded with marketing messages, real-life interaction with products and brands (a.k.a. experiential marketing) has become increasingly valuable for airlines to get their message across. Last month, we wrote about the Southwest Airlines ‘porches’ in New York and Denver, while Delta Air Lines has opened a series of ‘SKY360 lounges’ at sports venues as well as film and culinary festivals in the U.S. to let the general public experience its product.

SKY360 lounges at sports venues
As part of a recent marketing push into New York, Delta has become a major sponsor of the New York Mets and the New York Yankees baseball teams. The add an extra dimension to the sponsorships, Delta has opened a ‘SKY360 Suite’ at the New York Yankees stadium, and a ‘SKY360 Club’ at Citi Field, home of the New York Mets. Both lounges (video here) are located directly behind home plate and are accessible for baseball fans in the premium seat sections. Delta also regularly invites its most valuable frequent fliers to the SKY360 lounges.

The Delta SKY360 venues feature a dining room, a cocktail and wine bar (which serves Delta’s signature in-flight cocktails), and the seats have in-seat waiter service. TV screens air live games in addition to Delta content, and there is a computer terminal available for baseball fans that would like to sign up for Delta’s loyalty program. In 2011, Delta will also open a ‘SKY360 Club’ at the Madisson Square Garden in New York.

Atlanta-based Delta in April 2010 also opened a SKY360 Lounge at the Atlanta Braves baseball stadium, and a ‘Delta SKY360 Legends Club’ in March 2010 at the Minnesota Twins ‘Target Field’ stadium in Minneapolis (home of Northwest Airlines, which was acquired by Delta in 2008). This SKY360 Club at Target Field features a concierge desk staffed by Delta employees outfitted in the airline’s signature ‘red coats.’
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Cathay Pacific’s ‘The Cabin’ lounge caters to the connected traveller

Cathay Pacific is about to open ‘The Cabin’, its latest departure lounge at Hong Kong International Airport. Designed by Foster + Partners, the concept of the 1,300-square-metre space builds on several current consumer trends, such as connectivity, individuality and a healthy lifestyle. The Cabin is separated into five different zones – The Reception, The IT Zone, The Deli, The Health Bar, and The Relaxing Zone – and introduces some innovative seating and dining concepts. Furthermore, lounge guests can use one of 21 Wi-Fi enabled iPads, pre-loaded with apps such as newspapers, magazines and games, and unlimited Wi-Fi internet is accessible through the lounge, without the need for a password. 

Cathay Solus Chair
A main feature of The Cabin is the new ‘Cathay Solus Chair’ – a futuristic bubble-like chair, which provides each person with a private space to eat, work and relax. The purpose-built unit consists of a small built-in table, coat hanger and power outlet, and each chair is hand finished by Poltrona Frau in Italy. In total there are 41 Solus chairs available in the entire lounge. 

IT Zone
The IT Zone consists of two sections: the main area and an IT room. The main area is equipped with 21 Solus Chairs, 21 iPads and a ‘Techno Bar’ with 6 iMacs, as well as plenty of power outlets. The entire back wall is made of glass with LED lighting that pulsates every half an hour to help passengers keep track of the time. The IT room has 11 private workspaces, each equipped with an iMac, a printer and a telephone. The walls are lined with either reflective white glass or sound-absorbent leather panels. There is also a meeting room with videoconferencing facilities. Read full article »

Brands team up with airports and airlines to let travelers try their products

Faced with ever more experienced consumers, who routinely ignore the commercials and ads thrown at them, brands have to find new ways to break through the advertising clutter to reach and engage consumers. Coined by, ‘tryvertising’ can be thought of as “product placement in the real world, whereby brands integrate their goods and services into daily life in a relevant way, so that consumers can make up their minds based on their experience, not on the message.” Airlines and airports are popular settings for tryvertising campaigns, which can also be an additional source of revenue for them or a way to improve service.  

Marriott Courtyard Airport Lobbies
On September 8, the Marriott Courtyard hotel chain showed off its new ‘Refreshing Business’ lobby concept in New York’s Grand Central Station by installing a replica of the lobby in the station’s VanderBildt Hall. Train passengers could use the hotel lobby to relax while they waited for their train. From September 15 through November 14, 2010, Courtyard is also bringing its new lobby to life with the installation of temporary Courtyard Airport Lobbies in three of the busiest airports in the U.S. — Chicago O’Hare, Atlanta Hartsfield-Jackson and Denver International. Each of the lobby zones will feature some of the new furnishings and amenities found in the real Courtyard lobbies. Travelers can relax in the new lobby zone and also receive a complimentary Courtyard luggage tag. Read full article »

In-flight magazines increasingly find a niche audience

With audio and video on demand (AVOD) a standard in-flight entertainment feature today, and with travelers increasingly carrying their personal entertainment devices with them onboard, passengers may start to lose their interest in in-flight magazines amidst all the media overload. To make in-flight magazines more relevant to both passengers and advertisers, a number of airlines have begun to publish special-interest and route-dedicated in-flight magazines.

LAN Chile has just launched an in-flight magazine, called ‘in-Wines’ targetted at wine lovers traveling in business class. The first edition of in-Wines includes essays by Chilean master sommelier Héctor Vergara, serving and pairing tips, a wine-tasting class, wine reviews and Chilean and Argentinian wine routes. Connecting with passengers “on a lifestyle subject they are passionate about” is the driver behind LAN’s launch of the wine-dedicated in-flight magazine. Says LAN’s manager in-flight entertainment Violeta Garcia, “the magazine gives us the opportunity to reinforce our credibility as wine connoisseurs”. According to Spafax, which also publishes LAN’s regular ‘in magazine’, “in-Wines is already a huge hit with readers and advertisers – with over 20 major brands buying space in the first edition.”

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‘On the Fly’ course teaches travelers how to make the most of frequent flyer programs

There is no shortage of online help for frequent flyers to help make sense of the often complex and often changing policies in airline loyalty programmes. Websites such as Flyertalk,, InsideFlyer and aim to help travelers make the most of frequent flyer programs, often by letting community members help eachother. 

Now, Nicholas Kralev, who has flown more than 1.5 million miles during the past decade in his job as the diplomatic correspondent and business travel columnist for The Washington Times, has launched a smart ‘feeder business’ concept: ‘On the Fly’ seminars, named after his weekly column in the Washington Times, are real-life ‘frequent flyer 101’ courses that aim to educate participants on the best ways to benefit from frequent flyer perks when traveling.
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What U.S air travelers want: more legroom and less fees

The new fees that airlines are charging to increase ancillary revenues, along with the lack of legroom, are the two biggest passenger complaints, according to TripAdvisor’s second annual survey of air travelers in the U.S. The travel review website asked more than 3,200 U.S. respondents about their air travel preferences, on a range of topics from airport security and airline fees to legroom and in-flight Wi-Fi. 

Some of the most interesting findings from the survey: 

Lobbying for Legroom. 25 percent of travelers said that limited legroom was one of their biggest gripes about air travel. When asked what airlines should offer to make the in-flight experience better, 30 percent lobbied for more legroom and 38 percent requested roomier seats. 

No More Fees Please. In the past year, nearly every major airline has either added or raised fees for amenities that previously were free of charge. 25 percent of respondents consider airline fees to be their biggest complaint about air travel, and 56 percent said that checked baggage fees were the most annoying current airline fee. When asked which fee travelers thought was most likely to be added or expanded by airlines in 2010, 31 percent responded with seat selection fees.
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ExpertFlyer’s ‘Seat Alerts’ let’s travelers know when their preferred seat becomes available


Websites such as SeatGuru and Seatplans help travelers find the best seats on an aircraft. A new service called ‘Seat Alerts’ from, a website that caters to frequent fliers in search of upgrades and awards, now solves the problem of actually getting that desired seat. The ‘Seat Alerts’ tool lets passengers set up an alert for any aisle or window seat, or a block of seats for multiple travelers, in case these seats are already taken. The selection of preferred seats is then linked to to real-time data provided by 85 airlines worldwide. When the desired seat becomes available, as seat reservations change regularly, users receive an e-mail notification.

The service also works for exit, premium and bulkhead seats, which are usually available to frequent fliers with elite status. For those without elite status, such premium seats typically become available 24 hours in advance. Alternatively, it is possible to tell the system to ignore seats that are only available for frequent flyer members with a particular status level.
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The Amateur-Expert Traveller

Amadeus has just released a new consumer trends report, called ‘The Amateur-Expert Traveller’. According to the study, today’s travellers are more knowledgeable, more adventurous and more likely to live in an emerging economy than ever before. The report is the latest in the series of trend reports by Amadeus, which also include ‘The Austere Traveller’ and ‘Future Travel Tribes 2020’.

The Internet is the major force behind the emergence of the ‘Amateur-Expert Traveller’, making the travel market much  more transparent by putting detailed information at the fingertips of the average traveller. Empowered by the likes of TripAdvisor, Zoover, SeatGuru, Bing Travel and TripWolf, knowledgeable travellers often know more what to expect about their flight, accomodation and destination than most travel, airline or hotel agents. They are also more demanding as their expectations of service have diverged: Today, travellers either expect a totally touchless online self-service experience, or they expect a very high level of personalised service.
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Qantas and Cathay Pacific latest carriers to adapt premium cabins to ‘the new normal’

The economic downturn and the resulting sharp decline in premium business travel is forcing network carriers to re-think the seating configurations in their long-haul aircraft. As recovery seems not to be coming soon, airlines one by one are taking steps to rightsize their premium seating. For example airlines with a relatively large exposure to business travel, such as Lufthansa, BA,  and Qatar Airways, have already reduced their premium seat capacity, while Air France says it is accelerating the roll-out of its new premium economy class to appeal to cost-conscious business travelers.

Qantas is the latest airline to announce a reconfiguration of its long-haul fleet, saying it will replace a number of first and business class seats due to the drop in premium demand. About 15% percent of premium seats are expected to be cut. According to Qantas CEO Alan Joyce “it is very clear the productivity is not right – we have too many premium class seats on many aircraft.” Joyce admits the reconfiguration of aircrafts may cost the company “a lot of money”, but says the plan will provide “a better revenue-generating alternative.” Earlier this year, Qantas already suspended its First Class cabin on several routes, upgrading  some business class passengers to First Class instead (with business class catering) at no extra cost. Read full article »