Air Transport World

Selling the niche.

Icelandair is using time and frequency to market itself as a hub-and-spoke flag carrier

Icelandair is initiating a major marketing campaign as the third and final phase of its decade-long restructuring program--a restructuring that is giving it market shares of more than 50% on some routes. Initial phases included achieving a desired level of flight frequencies and modernizing the fleet (ATW, 12/95).

"For the past six to eight years the focus has been very much on production," said Sigurdur Helgason, president and CEO. "The focus now is on branding and marketing. We are standing at the crossroads where we shift our strategic focus from production to marketing the product."

The airline has started a major branding effort to sell the product that will include TV ad campaigns in specific markets along with a new aircraft color scheme and logo. The first aircraft in the new livery is scheduled to roll out before the end of the year. Although it has been a decade since Icelandair began to shed its image as the "backpacker airline," the label is still there.

"Icelandair still has the reputation for being a low-fare airline because when we were building the route network we didn't yet have a great product, didn't have a brand to appeal to the public," said Steinn Logi Bjornsson, senior VP-marketing and sales.

"Also, we don't have a strong frequent-flier program or anything like that to attract traffic. So what we are doing is working toward certain distinct markets to develop a reputation of excellence and provide the best alternative for routes such as Scandinavia-USA or Scotland-USA. These are the city-pairs where we have the shortest elapsed time. …

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