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Justin Wastnage / Sydney
Air NZ taps viral
marketing to raise profile
As an end-of-the-line carrier located
in a small country, Air New
Zealand might well be expected to
be a follower rather than a leader
in the industry. But, as the online
viral success of its latest television
commercials show, innovation does sometimes
originate in unexpected places.
e television spots showcase Rico, an unspeci ed
South American rodent, whose clumsy English leads
to double entendres, sexual innuendo and other
risqué humour that most national carriers would
baulk at endorsing.
Jim Henson's Creature Shop in Los Angeles created
Rico at no small cost. But the investment appears to
be paying o , with Air New Zealand's adverts among
the most popular items on the video-sharing website
e reason for the big marketing push is the arrival
of the carrier's six Boeing 777-300ERs, the rst of
which was delivered in late December, and which
will be pressed into action from 2 April on ser vices to
London via Los Angeles from the airline's Auckland
base, currently own using 747-400s. e aircra are
laid out in several new seating con gurations that are
the result of a lengthy covert design programme begun
in 2007 and transferred to the -300ER from Air New
Zealand's original order for 787-9 Dreamliners.
With some of the longest stage lengths of any
international airline, Air New Zealand was keenly
focused on improving passengers' long-haul
experience, explains Rob Fyfe, the airline's chief
executive. New Zealanders' egalitarian streak also
meant equal e ort was put into economy class cabins
as premium. Over 30 concepts, including bunk beds
and cluster seats, were considered before the airline's
technical design team settled on a lie- at seat dubbed
the Sky Couch.
Stretched over three seats, the Recaro -built Sky
Couch allows a couple ying together to purchase
the middle seat in a row at half price, allowing them
to stretch out.
e banks of premium economy Space Seats in the
centre of the aircra are angled together for couples,
while those on the outside of the cabin are angled apart
for solo business travellers. Built by Contour Aircra
Seating, the Space Seat design is owned by Air New
Zealand, which aims to license the seats to other carriers.
e -300ERs have new business premier seats too,
which Fyfe claims move the carrier into the "hybrid rst-
business class territory" pioneered by Virgin Atlantic.
Fyfe's joke-peppered speech hints at the
unconventional thinking required to approve a mascot
like Rico. He is also an aviation outsider, despite starting
his career with the Royal New Zealand Air Force and
being a graduate in Aerosystems Engineering from the
UK's Royal Air Force College. For over a decade, Fyfe
has worked his way up the marketing departments of
New Zealand and Australian banks before moving
to London where he headed up the ill-fated digital
television network ITV Digital.
Due to its South Paci c location, over 70 percent
of Air New Zealand's passengers are New Zealanders
returning home, with the rest being tourists. ere is
very little transit tra c from long-haul ser vices, Fyfe
says. So the challenge is to market to the far- ung Kiwi
community the advantages of ying with New Zealand's
national carrier, whose fares are unlikely to match
Middle Eastern and Asian carriers on the routes.
" ere is a sense of identity with the airline among
New Zealanders, but that is not enough," he says. "It
must be mitigated by a clear business strateg y [to be]
able to compete."
Part of this strateg y is to team up with Australia's
second largest carrier, Virgin Blue. e alliance was
approved in late December by Australian competition
authorities, reversing an earlier interim ruling.
Air New Zealand previously had a close relationship
with Ansett Australia .
Fyfe says that full code-sharing on trans-Tasman
ser vices will allow both Virgin Blue and Air New
Zealand to increase ser vices rather than shelve them,
despite the combined entity now set to control the
majority of capacity between the neighbouring
countries, with Qantas and its low-cost subsidiary Jetstar
reduced to second position.
Fi h-freedom rights allow o shore carriers to extend
Australia-bound ser vices onward to New Zealand. at
right is being exploited by Emirates, whose Airbus A380
ser vices to Auckland now account for around one-tenth
of all capacity.
In this ercely competitive market, Air New Zealand
has responded by launching its Seats to Suit branded fare
classes. Replacing two -classes of fares, the new single-
class ser vices are available on a seat-only basis, a seat-
plus-baggage, a standard all-inclusive economy ticket
branded e Works, or the Works Deluxe package that
guarantees a spare seat next to the passenger.
Fyfe believes the branded fares provide a more
sustainable revenue stream than simply stripping out
ancillary services, as many US airlines have done.
Yet for all the renewed focus on long-haul and
Australian services, Air New Zealand remains hostage
to its country's overseas appeal. Last year, long-haul
tourism fell dramatically, especially in the UK, a core
source market for New Zealand.
is was re ected in a 6 percent pro t drop to
NZ$137 million (US$105 million) for the carrier's
business year, ended June 2010. More drastically,
passenger revenue fell by NZ$429 million, due to a 7.1
percent reduction in yield and a 4.7 percent drop in
revenue passenger kilometres.
is September, New Zealand will host the Rugby
World Cup, when an estimated 70,000 spectators
are expected to visit the country. Despite his bawdy
humour, Rico has over 15,000 followers on Facebook
and over 350,000 people have viewed his best-loved
video clip on YouTube.
e trick will now be to convert Rico's fans into Air
New Zealand passengers. n
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