It’s often a powerful reminder to look at some failures rather than simply try and emulate hero brands. Australia has a recent example of what not to do. Ozjet – A recently launched business class only airline.
Ozjet came in November 2006 and disappeared in March 2007, in an industry plagued by price cutting, discount players and crumbling customer service and satisfaction. It stands to reason that the market was ripe for the opposite of what’s currently available. So what happened? Where did they go wrong?
Here’s the start up blog assessment:
Launch timing: Launched pre christmas aiming at business markets! Who all went on leave for 6 weeks…empty planes can really hurt cashflow.
Schedule: Only had a few flights available each day. Business travelers need flexibility of schedules. Insufficient frequency – 4 planes simply wasn’t enough to provide the regularity of flights required to keep business travelers happy. Why would I pay a premium for my ticket to wait at the airport for 5 hours for the next flight back to Sydney?
Product: 30 year old Boeing 737’s 200’s. Not exactly a premium offering. Yes, regular flyers notice what plane they’re flying in.
Branding: Look at the photo of their plane and logo. Not exactly premium. Looks more like a discount airline, as does the name ‘Ozjet’.
Advertising & positioning: Skywriting? How many business executives, wealthy individuals are looking up on an idle Saturday, thinking, I really must book a flight on Ozjet? They also had a launch TVC with Murray Walker screaming “Ozjet is GO, go go, go go…”
Again this misses the mark and does not espouse ‘premium service’.
Loyalty Schemes: No frequent flyer programme. No club lounge (a must for business travel, especially with 5 hour waits for flights!), no alliances with international carriers.
Terminal Access: If you like pretending you’re the beatles, then I guess it’s OK to have to walk on the tarmac to get to your flight – not if you’ve paid a premium. You want to directly from the business lounge, to the flight.
I’m all for bootstrapping and improving as you go. But in an established market with certain benchmark demands, it just doesn’t cut it. Where your point of difference is your offer, rather than innovation, you need to have the total package upfront. One that’ll make a consumer switch worthwhile. Air travel isn’t an industry where a half baked offer can survive, capital requirements and overheads will kill anyone who gets it wrong by the slightest of margins. It’s graveyard is littered with failures.
Put simply, the Ozjet business class offering couldn’t even compete with Qantas domestic economy, and that isn’t saying much.
