Niche Carriers Step Up Corporate Marketing Efforts

More low-cost airlines are recognizing the importance of business travelers to their long-term success, as both Kiwi International and Western Pacific this month revealed plans to become more aggressive in the corporate market.

Colorado Springs-based Western Pacific, which in the past has done minimal marketing to corporations, is listing itself in CRSs for the first time, starting with Apollo and Sabre; making scheduling changes to accommodate commercial traffic; and expanding its direct sales efforts to travel agents and companies.

"We will have an absolute focus on the business traveler," said Mark Coleman, Western Pacific's senior vice president of marketing. "We will immediately begin contacting the larger companies in the Colorado Springs and south Denver areas."

Coleman and Robert Peiser, the airline's president and CEO, took over management of Western Pacific in December after leaving TWA last summer. Coleman said that in the past, WestPac did very little direct corporate marketing.

Kiwi , which will begin flying again Jan. 20 following its Sept. 30 Chapter 11 filing and a subsequent infusion of investor cash, plans to continue its corporate sales efforts initiated in late 1995. But the carrier has set higher goals for its business-leisure mix and will focus more on smaller businesses.

"We'll continue talking to travel agencies and large corporate accounts, many of which have already been contacted," said Kiwi CEO Jerry Murphy, noting that the airline will create both travel agency and corporate travel manager advisory boards. "But we're also looking at smaller businesses and entrepreneurs who can't afford to pay $500 for a quick round trip."

Murphy said that prior to the bankruptcy, about 45 percent of Kiwi passengers were traveling on business. The carrier is now aiming for 60 percent.

These announcements follow programs initiated last fall by Frontier Airlines and Reno Air (<I>BTN</I>, Oct. 7, 1996). According to Jeff Potter, vice president of marketing for Denver-based Frontier, the corporate program initiated Oct. 1 has exceeded expectations. He would not reveal how many accounts the carrier has, but he did say the program's success has encouraged the airline to target smaller companies, starting this month.

Tom Wilkinson, president of The Travel Management Group, an Alexandria, Va.-based consultancy, applauded the carriers' efforts but cautioned that the industry remains skeptical of low-cost carriers. "Unless they do something serious, I don't think the business travel industry will take them seriously," he said.

Referring to spotty on-time performance among some low-cost airlines, Wilkinson emphasized the importance of preferential treatment for business travelers-particularly when it comes to seating-and dependable service. If these carriers can be consistently on time, he said, they'll do well in the corporate market.

In terms of operations, both Kiwi and Western Pacific are attempting to accommodate business traffic demand in the layout of their route maps. Beginning Feb. 2, Western Pacific will increase daily service to 16 cities while dropping flights from Colorado Springs to Las Vegas, Nashville, San Antonio and Ontario, Calif. "The business traveler is the most discriminating customer, whose number-one concern is frequency-not just the number, but also the spacing of flights," Coleman said. "Las Vegas is clearly a leisure destination and the other three were only one flight a day. Ontario is close to L.A. anyway, and Nashville is not a large market." The moves will boost aircraft utilization and reduce costs, he said.

Kiwi's relaunched system will include seven daily trips between Atlanta and Newark, six between Chicago and Newark, four between Chicago and Atlanta and two between Newark and West Palm Beach. Murphy said the carrier already had received more than 7,000 bookings as of Jan. 8.

Asked why a travel manager would want to make a long-term commitment to Kiwi in light of the carrier's shutdown, Murphy said, "It's a different airline today. We don't expect it to be a long bankruptcy, and additional investment is coming in the next few months. We're talking to Airbus and Boeing about aircraft purchases, and before the year is out we will increase frequencies and will begin serving two more cities, probably business markets."

According to Western Pacific, its biggest challenge is proving to business travelers that it is a serious airline. The carrier is known for the huge ads it paints on its planes, such as Vegas showgirls and "The Simpsons." "We want to present a more professional image without taking the fun out," said Coleman. "Call it a 'Friday business casual' attitude."

Additional plans for Kiwi include the installation of in-flight telephones, the introduction of ticketless travel this year and the signing of a frequent flyer partnership with a major airline, as well as a marketing relationship that could lead to code sharing with at least one foreign carrier. Kiwi also is talking to other low-cost carriers about domestic code sharing.