A G-zero world, a mad world, a world of consumer power

TESTCustomwebLP TESTCustomwebLP
By TESTCustomwebLP TESTCustomwebLP March 26, 2014 21:09

A G-zero world, a mad world, a world of consumer power

Who right now would be an economic, geo-political and/or military analyst? What with the bulk of the Russian army on the Eastern boarder of Ukraine, the Crimea taken by force out of the blue, MH370 seemingly intentionally crashed into the Southern Indian Ocean for no known logical reason, the Syrian conflict, the Egyptian crisis, Libyan instability, Turkish political unrest, the gradual collapse of Venezuela, North Korean missile launches and the “kidnap” of a US drone, Chinese and Brazilian economic contraction….Iraq, Afghanistan and Pakistan – the list goes on and on.

Today’s Air China figures are most interesting reading indeed (see APAC news for more). They back the general consensus that growth in China is slowing while Europe is powering ahead. Air China revenue from the company’s mainland China operations, which make up more than 65% of its business, fell 3.31% to 64.39 billion yuan, while European operations were up 5.71% at 10.15 billion yuan.

Most large global airlines serve all of these countries mentioned but more and more a focus is falling on British Airways and S7 as potential large scale losers in the Crimea crisis. These two airlines have had significant success over the past three years in connecting Heathrow passengers with a large Russian route network via Moscow and St Petersburg, and thus the current geo-political problems will be starting to have an effect on this business venture. The other loser is of course Aeroflot and its dreams of full EU market access via an old Soviet bloc country – No chance of that taking place now I feel.

Some might think that our matter of fact dealing with the MAS flight MH370 situation yesterday is somewhat harsh, other have mentioned that we have not gone far enough on the whole matter. My view is that right now there is only one real background story in all this that our industry needs to keep an eye on right now and that is the fact that Chinese tourists, who once saw Malaysia as an attractive holiday destination are now avoiding flight bookings altogether. The eleven largest Chinese travel agents confirmed that bookings between China and Malaysia had fallen sharply over the past two weeks and are tailing off still. Moreover many people have cancelled their trips flat, even though they stand to lose their money.

Now these facts point clearly to a mismanagement of the situation by the Malaysian government and/or MAS and it is likely that this situation will continue for some time until some sort of closure to the whole MH370 situation can be reached, which looks some way off right now. We can draw on the Japanese island dispute situation not two years ago to show us the immediate reaction by Chinese travelers to avoid Japanese air carriers and transits to Japan in a manner not previously seen anywhere else in the world other than save for military hostilities breaking out. Traffic on those routes only began to improve some 15 months after the initial political spate began and remains to this day below 2011 figures. Now the Japanese situation was different in that the Chinese government basically stated that people should not use Japanese companies or travel to Japan, but in this instance it is much more a consumer-led decision to avoid Malaysia. This could lead us to suggest that in the case of the Japanese product boycott in 2012 it was mainly down to the decision of the individual consumer to avoid Japanese products, which Central government in Beijing did state at the time was the case. So in short, the Chinese air traveler is, at the very least, highly susceptible to complete brand boycott en-mass and in this regard Chinese consumers seem to be unique at this time. Sure we have all seen cases of brand association and assassination before, but this is akin to everyone cancelling all travel to Singapore in the event that an SIA plane were to crash (an example of course), it is a situation that would not cross the mind of many citizens the world over. MAS and Malaysia are the victims of a culture shock. Given this fact it is very hard indeed for any airline to be cast in a fair light when large numbers of Chinese passengers are involved in a disaster such as MH370 and this in turn means airlines serving the Chinese market need to take guidance on how they can best manage a potentially damaging event such as that which MAS has suffered as the market has unique demands. I would argue that it is Malaysia and not so much MAS alone which has suffered brand damage in this instance. Personally, I don’t see what more MAS could have done in all this other than to distance themselves from the Malaysian government by asking that it is made clear to all and sundry who is handling things. But one thing is for sure MAS should publically lambast whatever idiot came up with the idea of informing relatives by text that the aircraft without doubt crashed. It does not matter what country you are from or who you are – That will offend.

TESTCustomwebLP TESTCustomwebLP
By TESTCustomwebLP TESTCustomwebLP March 26, 2014 21:09
Write a comment

No Comments

No Comments Yet!

Let me tell You a sad story ! There are no comments yet, but You can be first one to comment this article.

Write a comment

Only <a href="http://www.aviationnews-online.com/wp-login.php?redirect_to=http%3A%2F%2Fwww.aviationnews-online.com%2Feditorial-comment%2Fa-g-zero-world-a-mad-world-a-world-of-consumer-power%2F"> registered </a> users can comment.