Partly in response to these figures, Lorne Clark, former general counsel and corporate secretary of IATA, declared during last year's third annual World Low Cost Airlines Congress in London that LCCs were "where the action is and is going to be, at least for the rest of the decade." Europe, led by Ryanair and easyJet, offers the most LCC airlines, but new ones are launching throughout the world, including Africa—particularly in South Africa, where new LCC brands have made deep cuts into the market share held by bigger, more established companies like British Airways (BA) and South African Airways (SAA).

The rise of LCCs in this region is partly due to the massive expansion in South African air travel. Airports Company South Africa (ACSA) is expanding the South African infrastructure to the cost of about R5 billion (US$ 715 million), which will enable the country to carry 40 million passengers yearly by 2010, the year South Africa hosts the World Cup. This expansion, incredibly, is happening in a country of 44 million people, half of whom live below the poverty line and a quarter of whom are unemployed.

South Africa's local airline industry is dominated by well-known, state-controlled behemoth SAA, which is the second-oldest airline in the world behind KLM Royal Dutch Airlines. For years, airline travel was the realm of the country's truly rich—which meant that until recently, most passengers were white, even though whites make up less than 10 percent of the population. In the years since the country embraced democracy in 1994, contenders to the SAA hegemony in the skies have been many, including Sun Air, Phoenix Air, Civair, FlightStar, and Intensive Air. SAA managed to swat all of these out of the sky…until a new breed of young, hip, irreverent brands arrived. Today, depending on when you book your ticket, a two-hour flight costs just about the same—or less—than a 16- to 19-hour bus journey.

The LCC market in South Africa is dominated by three carriers: kulula.com, 1time, and Mango Airlines. The brand names of these airlines alone—which do not have any regional references—greatly reflect how new customers are being convinced to fly and how, according to some reports, close to a third of SAA's local market share has been diverted in only a few years.

LCC Branding: Easy for Some
In July 2001 the first of these—kulula.com—opened for business. The airline, operated by Comair Ltd. (which also owns the BA franchise in South Africa), was launched after Comair stopped offering its own flights and instead created a brand that Nadine Damen, kulula.com's marketing manager, says means "easily" in the Zulu language. (The word also means "undress," but Damen claims, "That's not why we chose the name!")

The brand flies striking green and blue planes and includes what Damen calls "real people" in the advertising. "Kulula.com's ads are known for their quirky, almost slapstick-type humor, and never shows an aircraft or 'hostie,' " she says. "They focus on local flavor and humor." To this end, TV viewers and billboard gazers have been treated to images of South Africans from all walks of life dressed up like kulula.com "fans," complete with capes and propeller beanies, ready to take to the skies. Most of these ads feature the kinds of people who are the absolute antithesis of the jet set: the mishmash of sorts you might see waiting for a bus or shopping at Kmart.

The press wondered whether kulula.com was somehow belittling overweight, older, non-beautiful, and (in some cases) non-white travelers. But most South Africans saw an honest representation of themselves—and logged on to book tickets that were substantially cheaper than those offered by SAA. SAA, for its part, pretended not to notice. In one blow, kulula.com became the airline for "the rest of us," and most South Africans would likely say, well, that's just about all of us.

And that desire seems to be mirrored across the world. A quick look at the brand names of other LCC airlines worldwide confirms that flagged brand names are going the way of the bi-plane. Ryanair and easyJet are successfully flying European skies, as is Tiger Airways in Asia, Nok Air in Thailand, Jetstar in Australia, Freedom Air in New Zealand, Sama in the Middle East, Oasis in Hong Kong, and Zoom and WestJet in Canada. All of these LCC airlines offer brands whose names bear no affiliation to any particular country or state and sound less staid and intimidating than those of yesteryear. Most do not sound like airlines at all. And that's just the point.

This will, of course, prompt some traditional airlines to try what De Villiers jokingly refers to as putting "lipstick on a bulldog" by offering their own neutral, funky, and cheap sub-brands. De Villiers points to SAA-owned Mango Airlines, the most recent and most aggressive competitor to kulula.com. The Mango name purposefully distances its brand from SAA's other local airline, SA Express, which, for its part, offers some very attractive fares as well.

Hein Kaiser, spokesperson for Mango Airlines, says that "after evaluating thousands of possible brand names, the decision to christen the airline 'Mango' followed an unexpected sequence of events." Apparently, while the company was choosing shades of leather for the aircraft seats, "a bright, orange color, dubbed 'Mango,' captured everyone's attention and seemed to find appeal." Kaiser states that Mango is a "true" LCC and not simply a "no-frills airline" (a direct jab at kulula.com)—yet neither is Mango a premium carrier. "A name like Mango works for many reasons. It has a positive resonance with the public: it is bright, positive, and irreverent without being facetious."

Asked whether there was value in the brand name not being associated with any particular country or region, he suggests considering that "an airline's name, as with any other brand, is a commercial entity and thus does not have to be tied to a geographical or human affiliation in order to be lent brand positioning." De Villiers adds that it probably helped that the name "Mango" is fairly similar to the European mobile network operator brand name Orange SA.

Kaiser points out that Mango is trying to reach the "unflown" market using the marketing model of other carriers like Ryanair and Southwest. According to Kaiser, Mango succeeds because it is South Africa's first "true" low-cost carrier, flying a market that grows 15 percent per year "more affordable airfares (20 percent more affordable seat by seat)" as well as the usage of "technologically advanced, new-generation Boeing 737-800 aircraft." According to the company, Mango's success after its first months of operation has been remarkable. By its own accord, the company has sold half a million tickets, taking only six days to reach 10,000 "guests traveled" versus "a competitor's" record of 20 days to do the same. Within 35 days Mango had flown 100,000 guests versus the three months it took its "nearest competitor" (surely kulula.com) to do the same. Mango may indeed be a lipsticked bulldog, but customers seem darn fond of it.

And kulula.com has taken notice.

Price Wars
By the end of November of that year, the South African press was writing about a "price war" among LCCs, with Mango's archrival countering with ultra-low prices: R168 (about $22) between Johannesburg and Cape Town, a flight that covers approximately the same distance as a jaunt between New York and Chicago. Into the mix came 1time, with a new fare that was a whopping R3 (approx. 40 cents) cheaper for the same flight.

According to Anya Potgieter, 1time's marketing manager and brand custodian, the airline is named for a South African colloquialism for "just like that" or "for real." 1time often refers to itself in the press as 1time.co.za (though that URL redirects to www.1time.aero) in order to drive traffic to its website, but the company's official name is 1time Airline (Pty) Ltd., trading simply as 1time. The name, she says, "creates talk value" because—like kulula.com—people wonder where it came from. Notably, too, the slang word "1time" is an expression that is far more likely to be used by South African black people than white people, very few of whom are likely to be familiar with it. Even South African airline brand expert De Villiers was at a loss to explain what 1time meant. On the other hand, white marketing professionals are not 1time's preferred target market.

1time offers travelers "more nice, less price." That use of the word "nice" reflects the way Zulu- and Xhosa-speaking people interchange English adjectives and nouns, as well as the absence of articles and expressions for degree of comparison in the Zulu language. This usage has spilled over into informal South African English, where even first-language speakers are likely to say something is "nice" when it is good and "nice, nice" when it is very good, as in "that flight was nice, nice."

This kind of aggressive and targeted branding has given 1time quite a ride since its launch in 2004. Potgieter says 1time urges passengers to "fly with us; it won't cost you an arm and a legroom" and backs that up with plenty of comfort in the air. More than that, she says, 1time is the only LCC airline that "doesn't have a 'mother' company that pays the bills." The company has subsequently attracted an ever-growing cadre of travelers who are made up of "real people who understand and appreciate what it is to work toward your dream." 1time has built an authenticity into the brand that kulula.com might envy.

Potgieter gets in a subtle dig at SAA when she says 1time proves to consumers that "private enterprise can work, despite the bully tactics of parastatal companies. So yes, we are the little guys with the big heart, because the business is sustained by hard work and good service, as opposed to endless reserves of the taxpayer's money." Indeed, the perception that SAA's Mango is a low-cost airline paid for by taxpayers is one that is fueled gleefully by the local press and probably one of the biggest challenges the brand faces locally. On March 2 of this year, Business Day quoted Public Enterprise Minister Alec Erwin asking Parliament the day before to ask the South African taxpayer to bail out ailing SAA to the tune of what is believed to be about R4 billion ($570 million). Erwin conceded that thanks to "the very viable and vibrant low-cost market, SAA had to discount so many fares on its higher-cost airline that the effect on the total airline was negative." In other words, Mango's ultra low-cost fares were hurting SAA, who was passing on the pain to the taxpayers. Nothing could be done, he argued, because SAA, by flying Mango, was simply mirroring what competitors Comair and BA were doing. Exclusion from the LCC market would be yet more hurtful for the national airline, which he referred to as a "national asset."

Potgieter's final words on 1time could indeed be applicable to branding the LCC sector in general: "You need to be remembered for your name, your brand, your product, your service and, of course, your people." If 1time and its fellow LCC brands overseas continue to do so, the entire face of flight worldwide is likely to change. For real.     

[30-Apr-2007]