“We’re evolving our ‘Beauty of Flying’ campaign, taking it to the next level, to make the brand more tangible,” said Ms. Chou, a native of Taiwan who was raised in the U.S. "We should be out there in a more distinct and active way, talking about our brand."
The campaign plans follow Hong Kong's Cathay Pacific Airways decision to buy Dragonair for $1.05 billion earlier this month, a decision that highlights the smaller airline’s struggles to define itself.
Founded in 1985, Dragonair falls awkwardly between veteran national airlines like Cathay and Singapore Airlines and the budding number of low-cast carriers appearing across Asia. With fares are on par with much larger airlines like Cathay, it certainly isn’t a budget carrier. But it hasn’t cultivated a reputation for the quality and service top Asian airlines are known for worldwide.
Dragonair’s success has relied mostly on its enviable position in China, where it flies to 23 cities, including the lucrative Hong Kong-Shanghai route, far more than any other non-mainland airline.
Despite constant lobbying with China’s aviation officials, Cathay Pacific, for instance, has only secured permission to fly passenger services to two destinations there--Beijing and Xiamen. Expanding its access to the mainland was a key driver in Cathay’s decision to take over Dragonair. Cathay's owner Swire Pacific already held a 17.8% stake in unlisted Dragonair. The other shareholders were China National Aviation Co., part of Beijing-controlled Air China, and Citic Pacific.
China’s airline industry is exploding as foreign business travelers flock to its fast-growing economy and Chinese increasingly travel outside their borders. Over the next decade, the World Travel and Tourism Council predicts China will become the second largest travel and tourism industry in the world after the U.S.
Although the Dragonair brand “will still be marketed for at least another six years,” said Ms. Chou, what the merger means long term to the airline is unknown.
“The shareholding realignment is subject to full regulatory and shareholder approval which will take some time,” said Charlie Stewart-Cox, Cathay’s general manager of marketing in Hong Kong. “It is far too early to provide anything further on future cooperational details between Cathay Pacific and Dragonair at this stage.”
For many in Hong Kong’s airline industry, “it does make sense for Dragon to continue to operate separately from Cathay. It is an incredibly strong brand and it would be shame to lose that,” said one executive familiar with both companies.
Dragonair has realized its brand image may be strong, but it’s not necessarily positive, which led to Ms. Chou’s appointment in August 2004. Until she joined the airline, she was a management consultant at Towers Perrin in Hong Kong, before which she worked as a strategic planning director at WPP’s JWT. Earlier in the U.S., she held management positions at United Airlines and Northwest Airlines.
“We’ve been very fortunate to have great air rights in China, because until just a few years ago, it was a very restricted market for outside airlines, so the airline didn’t need to do much about consumer marketing in the past,” said Ms. Chou.
Huge demand for those routes allowed the airline to establish a sales and trade network without worrying too much about its image. Now there are more choices for passengers as new carriers, including Cathay, slowly gain permission to fly to Chinese destinations.
Unlike Dragonair, “those airlines have a very strong brand image and enjoy strong brand preference from their customers,” she said.
Since she took over the airline's product and corporate marketing and its loyalty program, she’s taken steps to improve the brand by reaching out to consumers beyond normal airline tactics. Last summer, for instance, she orchestrated a joint promotion with Coca-Cola that put Dragonair branding on Coke Light cans.
This year, Dragonair is sponsoring the latest season of a popular singing contest series in China, “My Show,” created by Universal Music and its joint venture partner, Shanghai Media Group. The airline will be embedded into two episodes airing later this year when the contestants travel from the mainland Hong Kong.
She has also given the airline’s print ads a more emotional touch by communicating Dragonair’s “Beauty of Flying” theme with graceful images commissioned from contemporary Chinese artists.
Further innovative plans are in the works, with help from a new agency. Earlier this year, Ms. Chou appointed Leo Burnett Worldwide in Hong Kong, partly based on the network’s “strength in China.”
The Publicis Groupe agency and its Starcom media division won the business following a pitch against the incumbent, Omnicom Group’s DDB Worldwide, its TBWA Worldwide network, WPP Group’s Ogilvy & Mather and Bravo, a local agency founded by Hong Kong-based Aaron Lau, who resigned as DDB’s chairman-CEO, Asia after 16 years with the Omnicom agency last fall.
New advertising will debut in the fall with “a new positioning for the brand, a new philosophy,” said Eddie Booth, chairman-CEO of Leo Burnett, Hong Kong. “The biggest challenge is in the category, because most of Dragon’s product offering lies in commuter routes, not long haul travel where service can be emphasized. Plus air travel in China is becoming so intense and immense,” he said.
Even so, the strong performance of Asia’s airline industry means most carriers are profitable, unlike in the U.S., “where low-cost carriers have won the war,” said Ms. Chou. “It’s more fun to be in a growing airline market rather than a shrinking one like the U.S.”
Other appointment news in Greater China
[guangzhou] Austin Lally has relocated within Procter & Gamble to VP, corporate marketing for Germany in Frankfurt from VP, beauty care, Greater China in Guangzhou, where he has been based for the past seven years in a variety of marketing positions at the U.S. consumer goods giant. His former China role will be split among several people, including Udai Kunzru, who was promoted to general manager, hair care, Greater China from marketing director of the same division and Stevie Wong, now general manager, prestige, skin care and color cosmetics, Greater China from general manager, skin care, Greater China. All of the positions are based in Guangzhou.
[shanghai] Philip Murtaugh, 51, to exec VP in charge of global operations at Shanghai Automotive Industry Corp. (SAIC), China's second largest automaker. Most recently, he was CEO, China for General Motors Corp., one of SAIC’s joint venture partners in China, a position he held for five years until he resigned last March.
Before that, he was exec VP of GM’s joint venture with SAIC, Shanghai GM, and spent 32 years at the U.S. company. Through its joint ventures with SAIC and First Autoworks in Beijing, another major local carmaker, GM produces three passenger car brands in China--Buick, Chevrolet, and Cadillac.
SAIC, also a joint-venture partner with Germany’s Volkswagen Group (with which it produces the popular Santana in China), announced earlier this year plans to start manufacturing and exporting its own cars, including models created with technology purchased from failed U.K. automaker MG Rover. The company hopes to build up to 300,000 cars under its own name by 2010, of which up to 45,000 will be exported.
[shanghai] Sheena Jeng promoted to CEO, China at Publicis Worldwide, based in Shanghai from CEO of the Publicis Groupe division’s Taipei office, effective August 1. As head of the network’s offices in Shanghai, Beijing and Guangzhou, she succeeds Shanghai-based Neil Hardwick, who will move to another position in the network. Formerly the business director of Publicis in Taipei, March Chung will take over the general manager role.
[hong kong] James Ross to regional director, Asia, a new position at Granada International, part of U.K. TV company ITV Worldwide from media marketing and distribution director at Bloomberg Television. He will remain based in Hong Kong. The position was created to help Granada build strategic partnerships, particularly in new media areas through broadband and mobile phone platforms.
[hong kong] Barney Loehnis to network director, Asia/Pacific at Aegis Group’s Isobar division, from director of Europe, online at Warner Bros. in London. He will be is based in Hong Kong, one of Isobar’s global hubs alongside offices in London, Stockholm and San Francisco.