British Midland aims to land in U.S. market

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Unlike British imports Fergie and Teletubbies, British Midland Airways has yet to make a marketing splash in the U.S. But the airline hopes that will soon change.

The British carrier, which has experienced an image overhaul and a major growth spurt in the last five years, is laying the groundwork for service to the U.S. even as diplomatic hurdles remain.

On a broad scale, the regional carrier with the tagline "The airline for Europe" hopes to take on an increasingly worldwide cachet. The airline has announced plans to join United Airlines and others in the Star Alliance, which will give it links to destinations around the globe. It has options to buy two Boeing or two Airbus planes suitable for transatlantic travel.

In a move to bolster marketing, the carrier switched agencies earlier this month, shifting its $16 million account to Bartle Bogle Hegarty, London, from Faulds Advertising, Edinburgh, Scotland, after more than four years.

Driving the switch, Midland officials said, was a desire to give its brand more recognition on a worldwide scale, no small task considering price and schedules largely affect consumer choice.

"A 21st century airline brand shouldn't just be about price and destination," said Duncan Bird, group business director at Bartle.

BUILDING AWARENESS

One of Bartle's goals likely will be to build brand awareness with frequent transatlantic travelers in advance of expected U.S. service. The tagline "The airline for Europe" will be replaced, Mr. Bird said.

British Midland is so eager to launch U.S. service that the carrier kicked off what it said was its largest ad campaign ever in September via Faulds, centering on a lack of competition in the transatlantic market. The "Make the air fair" print, outdoor and direct mail campaign tries to convey that a cap on competition on U.S.-London routes is gouging consumers.

The airline argues fares from Heathrow Airport, British Midland's hub, to the U.S. are exorbitant compared with flights to the U.S. from other European capitals. The campaign is in part a lobbying effort aimed at persuading the U.S. and U.K. governments to sign an "open skies" agreement that would increase competition.

The current ad campaign also attempts to capitalize on British Midland's image as an underdog to British Airways. Though not as overt in needling British Airways as Virgin Atlantic Airways, British Midland still tries to convey an image of being more welcoming than the upper-crust British Airways.

"Everyone loves to pick on BA," said Steve Lott, business editor of Aviation Daily. "They try to portray it as a David vs. Goliath thing."

British Airways and Virgin along with United and American Airlines are the only carriers to serve London's Heathrow from the U.S.

EUROPE EXPANSION

As it pursues its U.S. ambitions, British Midland continues to expand in Europe. It has announced plans to launch service to Moscow, which would give it 13 new routes in the last two years. British Midland currently serves 31 markets throughout the U.K. and continental Europe. Among its recent offerings are routes to Budapest and Warsaw.

Faulds, which held the account from 1995 until several weeks ago, is given some credit for burnishing British Midland's image and helping the airline pose a challenge to British Airways on routes in Europe. The agency helped alter the airline's signature colors from gray and red to a trendy blue and brought the tagline "The airline for Europe."

"In the U.K., British Midland was seen as a very poor second to British Airways back in 1994," said Ian Wright, marketing director at Faulds.

British Midland, which is privately held and has Scandinavia Airlines System and Lufthansa German Airlines as investors, has recently begun to pose a challenge to British Airways. It already controls 14% of the gates at busy Heathrow -- more than any other carrier except British Airways. And its pending admission to the Star Alliance will give British Midland access to worldwide routes British Airways also serves.

STILL AWAITING APPROVAL

The airline has sought permission to fly to 10 U.S. cities, but the U.K. Civil Aviation Authority gave it licenses to fly to just four: Boston, Miami, New York and Washington. The airline must still receive final approval from the governments on both sides of the Atlantic to begin service and neither has acted on applications received from the carrier yet.

The highly restrictive U.S.-U.K. treaty referred to as Bermuda II blocks British Midland's quest to launch service to the U.S. from its London home base. Talks between the two governments on some type of "open skies" accord are ongoing, though slow-moving. The airline has said it hopes to begin service to the U.S. by next spring, though that time frame may be too ambitious, according to industry watchers.

"It's very slow and you're dealing with two governments that don't want to give a lot to the other guy, but they still want to see some change," said Mr. Lott of Aviation Daily.

Even if British Midland does receive the go-ahead, it may face challenges. The transatlantic market is overcrowded right now, Mr. Lott said, since airlines shifted planes there from Asian routes when that economy took a dive. But a revival in Asia could ease the transatlantic overcapacity.

COMPETITIVE REPUTATION

British Midland has a reputation for going into new markets with competitive fares, an airline spokeswoman said, but that may not be a long-term prescription for success in the U.S. market.

"The problem is a guy comes in and the big guys just lower prices in the marketplace and it becomes a tough game," said Bill Varner, director of marketing for aviation consultancy Avitas.

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