This Week in Commercial Aviation: 1-5 July

by 
Joseph Vito DeLuca
Friday, July 5, 2019
 • 
2
 min read

As we kick off the month of July, we take a look at KLM's new brand positioning amidst the growing trend of "flight shame", Vietjet's move into ecommerce and dive into the latest aircraft manufacturer news.

KLM: The Airline Encouraging You Not to Fly

As part of its new, Fly Responsibly campaign, the Dutch national carrier is urging travelers to make responsible decisions about flying and encouraging its customers to invest in the airline’s CO2ZERO carbon offsetting scheme.

KLM has built a microsite dedicated to educating consumers on how to make responsible traveling decisions, going as far as suggesting taking the train or conducting a video conference instead of hopping on a plane.

While it may seem a bit peculiar for an airline to urge travelers not to fly, the full-service carrier seems to be doing its best to get ahead of any bureaucratic red tape such as extra taxes or restrictions. The Dutch government specifically has been pushing for a national flight tax bill, which would tax 7 EUR per departing passenger.

In an OpEd piece for Bloomberg, Chris Bryant likens the tactics to cigarette manufacturer Philip Morris urging people not to smoke or alcohol companies prompting people to drink responsibly.

Of course this all comes on the heels of the growing social movement of "flight shame," made popular by Swedish wunderkind Greta Thunberg. Although it's difficult to pinpoint with certainty, this may very well be impacting Sweden's national carrier SAS. Its market value has plummeted and its shares have dropped by nearly 40 percent.

VietJet Join's Asian Aviation Foray into Ecommerce

From what seems to be a growing trend in the Asian aviation space, VietJet has announced its intention to launch its own ecommerce platform. The platform will cover banking, insurance and other financial services, as well as hotels, consumer goods and more.

This is after Southeast Asian counterpart AirAsia has expressed similar intentions, with the ambition to be "more than just an airline."

And this appears to be what's driving this trend. Airlines – specifically those operating in volatile markets – are looking to diversify to mitigate business risks. Fuel prices, seasonal fluctuation, socio-political impacts and economic uncertainty are among the many forces airlines must contend with. The additions of new revenue streams can go a long way in strengthening the financial resolve of airlines.

Not to mention, airlines are being faced with the onslaught of outside competition as Amazon and Google trudge further into the aviation space. This is forcing airlines to adapt and learn from these outside competitors.

Budget carriers are looking to leverage their abundant consumer data to expand their reach beyond travel and into consumers' everyday lives, according to VietJet Vice President Nguyen Thi Thuy Binh.

The Latest in Aircraft Manufacturer News

Another week, another development in Boeing's difficult 2019. The latest is Boeing seemingly admitting to falsifying documents in regards to the sale of a 787 Dreamliner to Air Canada. This news comes while the U.S. Department of Justice has been investigating the production of the aircraft.

While its competitor continues its strenuous PR battle, Airbus is enjoying a much more positive spotlight, specifically for its A321XLR.

In an article for Forbes, Samuel Engels writes, "we will look back at the A321XLR as a generational turning point in the history of aviation. It’s a step that was predictable yet nonetheless remarkable for its impact on the development of global air networks – and the opportunity it creates for smaller airports and smaller cities."

Circling back to our previous discussion on CO2 emissions, another benefit to be realized from the A321XLR could be a reduced carbon footprint on long-haul flights. As Engels outlined, the aircraft can link smaller airports and cities, eliminating otherwise required additional legs to a trip.

Since aircraft are seldom sold at their list price, Airbus’s new commercial chief Christian Scherer has dropped the long-held policy of publishing catalogue prices.

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