Friday, July 31, 2009

Lies, damn lies and statistics about Jetstar

I hate it when Airlines use statistics to tell bald-faced lies and make themselves sound more successful they they deserve to sound. I hate it at a purest marketing level and also because it helps perpetuate consumer mistrust of travel companies.

I came across a piece on TravelWeekly (AU) titled "Jetstar edges out rivals in share battle". Summary of the piece is that the Qantas owned Jetstar is now ahead of Singapore Airlines and Air New Zealand in Australia in term of international market share. This (in theory) puts Jetstar in the number two international carrier spot behind Qantas. Jetstar's share (according to the article) is 9% of the international market in May up from 6.1% the previous year. But over the same period Qantas' share dropped from 26.2% to 22.4%. A large part of the drop in Qantas is because Jetstar flights replaced Qantas flights. A simple carrier for carrier switch by the parent company. Clearly the near 3% lift in Jetstar numbers was helped by the near 4% drop in Qantas carriage share. Jetstar CEO Bruce Buchanan (in his press release on this story) clearly attributes the results to the performance of the airline and does not credit being given free traffic and passengers by Qantas. By "free customers" I mean customers they did not have to earn by marketing to and beating a rival to acquire.

At a conference last year a Jetstar rep put up a graph showing the domestic number passengers that Jetstar was carrying per month since its launch in 2004 and compared that to the number of passengers that Ryanair was carrying four years after its launch. On that comparison Jetstar was way ahead of Ryanair, the clear implication being that Jetstar is a better LCC that Ryanair at this stage of their development. They supplement this on their website by praising themselves for winning awards such as the "Top 5 Carriers for Passenger Growth 2009" award.

However just like international it is unambiguous that Jetstar owe more of their domestic passenger growth to the huge amounts of "free" traffic/passengers they were given from Qantas routes being handed over to Jetstar than to any creative marketing or pricing on Jetstar's part. In fact I would argue that a number of their marketing campaigns would do more to turn customers off the airline rather than on. Whereas Ryanair had to steal/lure away each customer from BA, easyjet, Aer Lingus, Jetstar simply had to wait for the customers to turn up looking for a red rat tail and then resign themselves to being served by people dressed in grey and orange.

I am not arguing that Jetstar is a bad airline. They have a much more enjoyable product offering than Ryanair and other LCCs I have flown. But to celebrate this growth as if they had started from a zero base (like Raynair and Virgin Blue) is disingenuous to say the least.

Am I being too tough of Jetstar? What do you think?

Thanks to StarvingFox at flickr for the photo


Trimmers said...

Great article Tim. Couldn't agree more. Bali is a classic example, there are no Qantas flights to Bali anymore and this would be one of Jetstar's leading destinations. We sell round the worlds and it now makes it very difficult to get a customer on a RTW ticket to Bali because using Jetstar means we can't take advantage of the continent based airfare...we have to use the mileage airfare. Also, all the New Zealand domestic routes have gone from Qantas to Jetstar [with little success thus far]...not that that is part of their ex-Australia figures but it demonstrates the continued trend of Qantas - Jetstar services.

Let's hope the corporate travel market in Australia bounces back so that we don't lose too many domestic legs to JQ.

Mark Trim, Director
RoundAbout Travel

Tim Hughes said...

@trimmers - thanks for the comment. True true