POWER 50 ;HIGH-FLYERS, YES, BUT IN DIFFERENT AIRSPACES; AIRLINES: SOUTHWEST EXPANDS AS NITED REVIEWS LONGTIME AGENCY

By Published on .

Indicating the radical change in the nature of Southwest Airlines and the industry in recent years, the 25-year-old carrier has grown outside its eponymous region and become the biggest airline advertiser, under the guidance of Joyce Rogge.

With aggressive eastward expansion, the carrier entered the fiercely competitive Florida market this year and this month is launching service into the discount-starved Northeast through Providence, R.I.

Declining investment in advertising by major carriers and huge growth at Southwest brought the carrier to the lead with a media spending total of $77.6 million in 1995, according to Competitive Media Reporting, a number likely to increase again this year with the expansions.

KEEPING LOCAL FOCUS

Despite now being nearly nationwide in service, the majority of Southwest's advertising has remained local-as much as 60% of the total budget goes to individual-market fare and promotion ads-emphasizing the continued belief that customers are best reached in their own markets.

"My background in marketing was to work hard locally," says Ms. Rogge. "As we expanded, we added programs with an umbrella effect on local markets."

Nonetheless, national advertising is expanding and could bloom as Southwest more fully serves the entire country. In 1994, Southwest entered national promotion for the first time, buying ABC's "NFL Monday Night Football." Last year, the marketer bought time on a network TV Christmas special, and this fall it's added Sunday football telecasts.

BIG ON FARE PROMOTIONS

The airline uses fare promotions heavily within its marketing. The most successful program has been "Friends fly free," introduced in 1991 and used frequently.

This summer, the airline made huge waves with $25 advance purchase fares on non-stop flights, to celebrate its 25th anniversary. That program tied up phone lines and briefly jammed Southwest's Web site (http://www.iflyswa.com), where passengers can buy tickets-but also forced other carriers to match the fares on competing routes.

The carrier has also defended it-self in the California market by staying on top of United Airlines' discount Shuttle by United and increasingly attracting business passengers, all-important to most of the industry, as other airlines lost them.

SHUTTLE TO DENVER

Meanwhile, United's shuttle-which many observers didn't think the carrier could pull off-continues to make inroads, adding markets and moving outside of the West Coast to Denver. The Shuttle offers differences from Southwest, such as first-class seating, regular meals and a bigger frequent-flier miles program.

David Coltman arrived in the spring of last year as United settled in to its employee ownership plan. And in a bolt out of the blue, this past August he called a review for the $100 million global advertising account that's been with Leo Burnett USA, Chicago, for 31 years.

The well-known theme "Fly the Friendly Skies" is all but out the hatch. Along with Burnett, the other shops competing for the business are Fallon McElligott, Minneapolis; and New York shops Ammirati Puris Lintas, Young & Rubicam and TBWA Chiat/Day.

FLEXED MUSCLE

Whether or not Burnett retains the account, Mr. Coltman has flexed United's marketing muscle simply by calling the review. The carrier's domestic ad budget has bounced back over the last several years from $49 million in 1993, back up to $72.9 million in 1995.

Leading the way among the larger carriers, United instituted electronic ticketing late last year, along with its online software, United Connection. These developments are saving the carrier an estimated $40 million annually, and E-tickets account for 30% of volume. United Connection software has 45,000 high-volume users registered and a total of 75,000 is anticipated by the end of this year.

WIDE-REACHING ALLIANCES

Increasingly important, the carrier also has had the largest, widest-reaching global alliances with foreign carriers. Partners include Lufthansa, SAS, Air Canada, Thai Air and South African Airways. And United intends to pursue additional alliances.

United is about to launch a "customer satisfaction philosophy" in all areas, including its planes, airports and advertising. Like other international airlines, it will begin to create new seat products in first and Connoiseur classes and expand the services at its domestic Red Carpet Clubs and international "Arrivals" clubs.

In this article:
Most Popular