AA i Delta z JFK do WAW ?

IP: *.neoplus.adsl.tpnet.pl 23.06.04, 12:21
American, Delta Could Gain Niche Market By Battling European Competitors

1,246 words
21 June 2004
Airline Business Report
Vol. 22; Issue 16
English
(c) 2004 Phillips Business Information, Inc.

American Airlines [AMR] and Delta Air Lines [DAL] are failing to exploit
their brand name recognition among Polish Americans and are sacrificing
market share to European competitors for flights between Poland and the
United States, according to Max Smetannikov, vice president of business
development and analysis at Global Advertising Strategies, a consulting,
advertising and marketing firm.

In an interview with Airline Business Report, he said it appears the single
biggest misperception by American and Delta is that it is not worth catering
to this market because neither offers direct flights from New York City to
Warsaw.

Smetannikov's latest research breaks down the airlines most often used by
Polish Americans to fly between Europe and the United States: LOT Polish
Airlines attracts 77 percent of these passengers; Lufthansa [DLAKY] gets 40
percent; British Airways [BAB], 27 percent; Delta Air Lines, 13 percent;
American Airlines, 7 percent; Austrian Airlines [AUALF.PK], 3 percent; and
Malev Hungarian Airlines, 2 percent.

The breakdown is quite different when examining brand awareness among Polish
Americans. LOT Polish Airlines still comes in first with 93 percent and
Lufthansa comes in next with 63 percent. But American Airlines captures a
sizeable 58 percent brand awareness and Delta is close behind with 56
percent. KLM Royal Dutch Airlines [KLM] follows with 39 percent and British
Airways has 38 percent brand awareness among Polish Americans.

Delta and American have no direct flights to Warsaw from any U.S. city, but
Smetannikov emphasizes the carriers could still carve out a much larger
market share among Polish Americans. For example, Polish Americans often use
Lufthansa, which goes through Frankfurt, Germany, to get to Warsaw. And
Lufthansa is way ahead of Delta and American in the Warsaw-New York City
market share. Moreover, Warsaw is not the destination for many Polish
Americans. They sometimes fly to Frankfurt and take a train to cross into
Poland, for example.

Delta now has direct flights to Frankfurt from both New York and Atlanta.
American Airlines flies directly to Frankfurt from Chicago. From New York,
American Airlines passengers fly through London and connect to Frankfurt.

"I think that American and Delta are thinking they have to launch a direct
flight" between New York and Warsaw to erode European market share,
Smetannikov said. But they could be smarter in how they position their
services to tap into a larger share of the Polish American market, he said..

It appears that Frankfurt would be a good transfer point for Delta and
American flying between New York and Warsaw, according to Smetannikov. When
he analyzes specific startup airlines, he normally pays a great deal of
attention to transfer points, but that was not part of this analysis.
However, he said an educated guess would make Frankfurt a logical transfer
city for those traveling into Poland. He also noted that at least three
startup Polish airlines are looking to shuttle passengers between minor
cities in Poland and Western European cities. As a result, the economics in
the region could make cities in Hungary, Bulgaria or elsewhere a more
attractive transfer point than Frankfurt for Delta and American.

One way Delta and American could overcome the absence of direct flights to
Warsaw is by emphasizing their Frequent Flyer programs. LOT Polish Airlines
and Lufthansa have Frequent Flyer programs that are less attractive than
Delta's or American's, according to Smetannikov. Advertising Frequent Flyer
miles could be a long-term strategy to gain market share.

It is hard to quantify the amount of money U.S. airlines are losing by not
courting Polish Americans. The U.S. Department of Transportation can count
the number of flights between Poland and the United States, but those hard-
and- fast statistics do not extend to third countries, or within an airport
if passengers switch to a competing carrier. Nevertheless, the revenues for
flights between Warsaw and New York amount to tens of millions of dollars a
year. Of course, Delta and American would have to compete with other carriers
for that traffic. As the European Community expands, Eastern European
carriers also may serve the U.S.-Poland route. Still, Smetannikov believes
the market is important to Delta and American. "You cannot just ignore a
market in a competitive industry or your competitors will have a competitive
advantage," he said.

Delta and American could parlay existing brand awareness with promotions and
discounts to attract customers, especially throughout the popular summer
travel season. Another strategy would be to make deals with regional European
carriers in order to acquire a share of LOT's regional traffic.

LOT Polish Airlines is the only European carrier that has direct flights from
New York City to Warsaw. But Smetannikov insists that LOT's market share can
be eroded if American and Delta target Polish-Americans, even if they do not
initiate direct flights of their own. One possibility is for American and
Delta to make deals with Polish startup airlines to transfer passengers to
destinations the startups do not serve. He noted that Delta already has such
a relationship with Aeroflot Russian Airlines [AERZF.PK]. "If you buy an
Aeroflot ticket from Moscow to New York, the only other airline you can
ticket through Aeroflot is Delta," he said. This means the Aeroflot passenger
can go to virtually any point in the United States that Delta serves.

He cautioned, however, that Delta and American would have to pick the Polish
startups carefully. In the United States, only one out of seven startups
survive, and Polish startups will face the same obstacles.

The decrease in foreign airline tariffs that resulted from Poland's May 1
accession into the European Union could allow U.S. airlines to pass cost
savings onto consumers in the form of lower-priced tickets. Consequently,
they should be able to more effectively compete with native national carriers
such as LOT and German Lufthansa, which have historically appealed to Polish-
Americans because of their lower costs.

"It's surprising that U.S. carriers are not responding to this enormous
opportunity," said Givi Topchishvili, CEO of Global Advertising
Strategies. "There are 10 million Polish-Americans in the U.S. and many of
them travel frequently to Poland and often choose it as their vacation
destination. When you consider that U.S. airlines are still experiencing a
financial crisis, it only makes sense for them to more seriously consider a
niche market like Polish- Americans."

Mary Frances Fagan, a spokeswoman for American Airlines, said the carrier has
been trying to regain its financial footing and will be on the lookout for
new revenues. "We are always looking for new market opportunities, and I'm
sure we would be glad to take into consideration these suggestions as we map
out [our routes] in the future," she said. American puts particular emphasis
on the availability of aircraft, bilateral relationships with foreign
governments and the potential for revenue. Anthony Black, a spokesman for
Delta, declined to comment on the analysis.

The research completed this month by Global Advertising Strategies stems from
phone questionnaires and personal interviews conducted between February 2003
and April 2004. No one commissioned the analysis. Global is an advertising
firm in New York specializing in multicultural markets. It maintai

    • Gość: Lukasz Re: AA i Delta z JFK do WAW ? IP: 204.60.124.* 23.06.04, 16:23
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