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Full-fledged airlines need to remain focused on staying luxe

When cost-cutting impinges on a brand’s core image.

Sipping champagne in the air, while chatting to my wife via WhatsApp, on the return flight to Singapore from Japan – I feel this is truly a new era for the globetrotter. I remember vividly the days when I had to have a local handset in Japan to stay contactable, and we had to switch off the phone the moment we boarded the plane until we landed.

How travelling has evolved. The mere act of flying in the 20th century was luxury, yet now, it is almost a necessity for city dwellers to get out of Singapore to regain their sanity. Our national icon used to make waves with many firsts, as the first airline to offer drinks, headsets and meals in Economy Class, the first to fly A380, etc. I was beaming with pride when I was among the first to get a sneak preview of the then yet-to-be-opened Terminal 3 and the first ever double decker plane, fitted with the first ever Suites. That edition of the A380 was the epitome of luxury, across all classes of travel. Even the economy class was a class of its own, first among equals. Those were the good old days.

(Related: 10 innovations that differentiate sleeping aboard the best airlines)

With the proliferation of low cost carriers (LCCs), we have witnessed full-fledged airlines having difficulties differentiating themselves from their cheaper counterparts. Some have even followed in the footsteps of the LCCs, such as charging for seat selections, in-flight food, beverages and excess baggage.

As the owner of a luxury furniture and lifestyle boutique, in the face of online retailers, parallel importers, and discount shops, I say purveyors of luxury goods and services must remain focused on staying luxe, despite the huge pressure to do otherwise. We must not resort to implementing disruptive pricing strategies and policies like everyday chain-stores or discount shops. We must fiercely protect the heritage and core branding of the company, and goodwill of loyal customers who have been with us since establishment.

In the context of carriers, while offering complimentary meals alone may not be enough to retain existing customers, it is one of the differentiating factors between full-fledged carriers and LCCs. Some full-fledged carriers have stopped serving complimentary meals for short haul flights within the Economy class, providing only soft drinks and snacks. Can the branding of the national carriers withstand the collateral damage; and is it worthwhile to risk losing loyal customers with the relatively small amount of potential revenue earned from the non-ticket sources in the short run?

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Deepening brand loyalty through its membership program and developing innovative products are essential to keep some of the best airlines in the world flying. One must not be penny wise, pound foolish, which may be perceived to be the case if one is splitting hairs to complicate the ticketing process with multiple tiers of prices within each class and add-ons.

Such a pricing model is channeling the inner spirit of the LCC, thereby diluting the brand image. Even with the newest and latest plane models boasting better fuel efficiency, a chain is as strong as the weakest link. Thus the premium carriers must ensure the entire travel experience is top-notch best in class throughout, starting from the first interaction during the ticketing, all the way to the collection of the luggage.

In this disruptive era, the relentless pursuit of revenue and efficiency has resulted in the lack of human touch, perceived declining emphasis on differentiations and customer service level. Sure, it is going to cost more to provide champagne in the lounges, amenities for short and medium haul flights and training to the service crews, but these are the raison d’etre why people are paying top dollar to travel with the full-fledged carriers with best service mind-set and excellent products.

When he is not managing Atomi and Actus Hause on Level Four of Mandarin Gallery, Andrew Tan consults for commercial developments in Japan and lectures part-time at Nanyang Business School.