AEROPERU FLIES HIGHER WITH BRAND NEW IMAGE

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LIMA-When Aeromexico picked up Peruvian state-owned airline Aeroperu in a $55 million privatization deal in early 1993, it had a hard sell on its hands.

Peruvians disparaged the airline's poor service and unreliable equipment but were tolerant because it was Peruvian. Under Mexican ownership, patriotic Peruvians began opting for scrappy, but still Peruvian, Compania de Aviacion Faucett instead.

It's been a bumpy ride, but the sky is a bit brighter for Aeroperu now. The airline has moved into second place on the lucrative Lima-Miami route, hiking its share to 32% from 25%, while Faucett has slid from 30% to 21%, although Faucett's flights are consistently sold out. (American Airlines remains No. 1 with more than a 40% share on that route).)

Aeroperu first turned to Publicitas Asociadas for help. The agency identified three areas that needed work: the perception that the fleet was outdated, woefully inadequate on-time statistics and poor customer service.

Updating the fleet was easy: Aeroperu used some older Aeromexico planes. Changing Aeroperu's image wasn't.

"The goal was to create confidence," said Alvaro Flores-Estrada, Publicitas account director. "We didn't even mention service and punctuality. We only spoke of new planes. They needed more time to work on the other aspects."

Under state ownership, advertising made promises about service that the airline didn't fulfill. "It was a bad situation," admitted Aeroperu Commercial Director Jean Delclaux.

To strengthen Aeroperu's image by associating it with its new owner, the carrier painted the planes with Aeromexico's blue and red motif, eliminating Aeroperu's red and white Peruvian flag. In major Lima dailies, Aeroperu heralded their arrival in July '93.

Meanwhile, Forum & Forum Communications was modernizing Faucett's image using a green color scheme when the new Aeroperu colors appeared.

"It's like playing soccer and they left the goal open," said Abel Aguilar, F&F creative director.

Faucett acted quickly, adopting Peru's national red and white colors. "Peru's colors are up in the air," noted a new Faucett TV spot, assuring viewers that "Our colors are Peru's colors." The same theme was repeated in newspaper ads.

Despite limited funding-estimated at about $1 million-the campaign forced Aeroperu to respond.

Publicitas's Mr. Flores-Estrada admitted, "It should have been a change of design and not a color change."

To minimize the damage Publicitas added TV spots, showing the new red-and-blue planes flying above Peru's national treasures, such as Macchu Picchu in Cuzco.

By November promotions, which accounted for about 60% of the $3 million marketing budget, were in full swing as Aeroperu began offering two-for-one fares for Miami and Cancun flights in ads in Lima newspapers, and later included a frequent flyer program.

The effort has paid off. Aeroperu's load factor has risen to 58% this year from 49% in 1993.

But little flag-waving Faucett is also pleased. "[Faucett has] pulled one over on Aeroperu," said Mr. Aguilar, "stealing its position as Peru's flag carrier."

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