Airlines look to cut ad spending in times of rising fuel prices

Mumbai: India’s airlines are axing ad spends while sharpening their advertisments to stay visible, as rising jet fuel prices force them to cut costs they consider as secondary.
Television advertising volumes for domestic airlines dropped 27% between January and May, compared with the same period last year, while print advertising volumes dropped 36%, according to TAM Media Research Pvt. Ltd.
They have, instead, started using different media to communicate their brands, including direct mailers to reach core target groups such as frequent fliers.
“At a time like this, what we will see increasingly is full-service carriers using loyalty programmes as a means of retaining top-of-the-mind recall and for select incentivization,” said Meenakshi Madhvani, managing partner at Spatial Access Media Solutions Pvt. Ltd. “Whenever there is a pressure on numbers, advertising spends are the first to go. What doesn’t get cut is the below-the-line ad spends, which are your promotions, etc.”
“If you are clear that these (ad spends) are not an expense but are going towards building a real business asset, also known as the brand, the amount of pruning (of ad spends) is either nil or marginal,” said Ramesh Thomas, president and chief knowledge officer at Equitor Management Consulting Pvt. Ltd. “So, those companies will look at increasing efficiency, rather than see it as a means of saving money for the bottom line, which can then go towards fuel costs.”
07/07/08 P.R. Sanjai and Gouri Shah/Livemint

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Categories: Indian Aviation- In General Jul 2008