On the mark

With United and Continental actively discussing a merger, and US Airways engaged in a hostile bid for bankrupt Delta Air Lines, it is almost a certainty that at least one of the Big Six US airline brands will disappear in 2007. The only at-risk US airline brand weak enough to warrant deletion is US Airways, although it has quite a nice name and is certainly an identity I would prefer to see stay around. However, Continental is probably the brand most likely to vanish, for the simple reason that in spite of Continental having one of the most stellar reputations for service of any US airline following Gordon Bethune’s turnaround efforts, is not quite as well known globally as United. Thus, if a United-Continental merger does materialize, the Continental brand will likely vanish, ironically enough, on its 70th anniversary.

Personally, if I was in charge of managing the brand portfolio of a combined United-Continental, rather than killing it off, I would preserve the Continental brand, and at the minimum use it to replace one of United’s subsidiary brands. Rebranding United’s high-end P.S. service as Continental would make sense given Continental’s premium positioning, although the flipside is that P.S. operates out of JFK and Continental is known for its Newark hub (although perhaps a United-Continental merger would make relocating PS to Newark a logical decision).

One slight difficulty that arises in airline brand portfolio management has to do with FAA certificates being assigned to the name of the airline that originally applied, with the result being that the remnants of acquired airlines, even when rebranded, must declare the identity the operating certificate is registered under. For example, the former TWA portions of American Airlines were, for several years after the retirement of the TWA brand in late 2001, declared to be “Operated by TWA, LLC.” This is a cosmetic problem, but as far as I can tell, most airline passengers don’t pay attention to it.

By far the biggest challenge faced by airlines attempting to deploy multiple brands has to do with fleet allocation. If you have 20 aircraft painted in the livery of Brand 1, and another 40 painted in the livery of Brand 2, the interchangeable use of the aircraft is not possible without confusing passengers. Different interior configurations can further complicate matters. These challenges are not insurmountable, and airlines using multi-brand strategies typically have such different target markets in mind with their different brands that the need for aircraft interchangeability is minimized.

What I would really love to see, therefore, would be both the United and the Continental brand surviving their probable merger in some form or another. The airline industry is littered with the wreckage of once-great airline brands which ceased to exist as a result of the brutal competitiveness of the industry, arguably the most loved collection of dead brands in any industry. Brands like Pan Am, TWA, Braniff and Sabena were powerful in their day, and continue to fascinate the public in spite of having, in some cases, not been used in commerce for decades. I sincerely hope that more great brands are not added to this pile.