Airlines Experiment With Niche Marketing

As the airlines continue a slow recovery in the wake of the 9/11 attacks and the resulting industry-wide slump, passengers are starting to fly again. The question for airline executives is, what do they want and what will they pay for?

The answer is still in the works. Several different airlines are taking new approaches to the question -- and finding some rather surprising answers.

Take, for instance, the world's largest airline, American. Business travelers headed from Boston (MA) to Manchester, England, recently found something missing from their flight: business class.

It's American's latest experiment in niche marketing. Figuring that most people on that route at this time of year are tourists looking for a good time and not willing to pay big fees for it, American is trying a single-class configuration that might remind you of a low-cost carrier like Southwest.

Other airlines are going the other way, instituting a single all-business class of service. The New York Times reports Lufthansa and Singapore Airlines are doing just that. In fact, Air France has spun off a new carrier called "Dedicate," aimed specifically at engineers and executives in the oil industry.

"For the first time, airlines are sitting down and looking at their assets, and trying to figure out the best way to deploy them," said Darin Lee, senior managing economist with LECG, in an interview with the Times. He says the lines between traditional legacy carriers and low-cost carriers is starting to blur.

Chicago-based ATA plans to add a business class. Ireland's Ryanair is rerouting its flights in hopes of saving hundreds of thousands of dollars on each aircraft. Delta's spinoff, Song, is appealing to women, figuring they plan most family trips and make up the majority of leisure travelers.

"Once you win the hearts of women, you know they'll talk about it," said Joanne Smith, vice president for Song's marketing. "They'll become evangelists for the brand."

FMI: www.aa.com, www.flysong.com