Air Transport World

When low fares are not enough: airlines need to rethink their advertising and branding strategies to address the concerns of today's skittish traveling public.(Marketing)

The war in Iraq having stabilized at a level of low-grade internal guerrilla/terror activity and Asia having been declared SARS-free by the World Health Organization, the stage should be set for a healthy recovery of air travel to, from and within the affected regions. Airlines are in the process of restoring schedules to pre-SARS levels and the braver ones even are campaigning to return to places like Baghdad and Basra.

Beneath the surface, however, lies an undercurrent of uncertainty about the future shape of commercial aviation within Asia. There are troubling signs that all is not well in forward bookings and that heavy, discounting is not having the expected impact on reservation phone lines. KLM CEO Leo van Wijk told shareholders in late June that "while it is true SARS has peaked, we're not seeing any substantial market improvement and thus improvements in our results."

Qantas has extended its fare promotion until the end of November. Singapore Airlines recently furloughed around 175 employees on top of 414 laid off in late June. Cathay Pacific CEO David Turnbull was quite blunt in his grim assessment of the post-SARS world: "Passenger numbers are picking up but yields are very low and will likely remain so. Forward bookings are better but still a long way short of what they were a year ago. …

Log in to your account to read this article – and millions more.