AIRticulate

Prioritizing Precious Expenditures: Livery Design or Customer Experience?

Aviation buffs everywhere love a beautiful livery, but painting and re-painting a fleet isn’t cheap. As part of its merger with Continental, United Airlines is in the process of rebranding its livery—for the second time in the past seven years (see AirlineReporter’s hilarious account here). With a fleet of roughly 700, the physical process of painting these planes costs an estimated $64 million (USD), not factoring in any design costs, opportunity costs of having an aircraft out of service, or operational costs (according to Boeing, an aircraft’s paint scheme alone can impact operating costs by up to $132,000 a year!).

In United’s case, the current redesign is surely necessary in the wake of a merger, but airlines everywhere invest heavily in the same area. Aerolineas Argentinas introduced a new logo in 2010, enlisting the assistance of prominent New York City-based agency. The price tag? More than $2.5 million to the agency alone, not factoring in the painting process, materials and opportunities costs. The idea that logo on the tail significantly impacts a customer’s purchasing behavior more than experiential factors is misguided at best. (For more on this topic, download our whitepaper entitled “Getting Over Airrogance” here.)

The kicker here is that both carriers are battling sub-par customer service reputations, with their only consistent feedback being that they are inconsistent. Trying to deal with a customer service issue at one of United’s hubs can be painful at times, as front-line agents generally have very little authority to solve problems—even those clearly caused by operational failures. Imagine, for a moment, if United were to implement Ritz-Carlton’s staff empowerment strategy, under which any employee, from the executive level down through front-desk and cleaning staff, can authorize an expenditure up to $2,000 to solve a customer’s problem. In the most extreme of examples, if every single one of United’s 40,000 airport operations and in-flight staff authorized a full $2,000 solution, it would cost United a total of $80 million. Between that and a nice paint job, which would go further towards enhancing United’s brand image in the eyes of consumers?

United Livery

United Airlines' livery redesign since merging with Continental will cost the airline an estimated $64 million, not factoring in agency/design fees and aircraft grounding times.

 

Argentinas

Aerolineas Argentinas new logo came with an estimated $2.5 million price tag in agency fees alone.

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