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MAXed Out

MAXjet Airways’ failure proves that a business model and strong marketing, in addition to a good idea, is needed to succeed when thinking about transatlantic business.

Capital intensive businesses such as airlines are prone to failure as their fixed costs are so high.  When the price of fuel or the number of people flying fluctuate dramatically, there is little management can do to adjust.  Throw in a much better capitalized competitor which decides that your nipping at its heels has gone far enough, and you’ve got a recipe for disaster.  When Swelled Head first spoke with Henry H. Harteveldt, airline expert at Forrester Research, he said pretty much the same (essentially predicting that American Airlines or British Airways could easily add Stansted flights and crush MAXjet).  His view was guarded to pessimistic as to the viability of MAXjet without something compelling to differentiate its business model, and he was spot on.

The failure of MAXjet casts a long shadow on business class airlines Eos and Silverjet.  They need to demonstrate a point of departure (sorry) that goes beyond a better seat, or they will follow MAXjet into the history books.  The biggest weaknesses these airlines face are narrow loyalty programs (useful only on their own routes), limited feeder networks, capital constraints that limit flights per day and number of destinations. 

Advertising in this category has generally been pretty uninspired given such innovation in the air.  Perhaps the failure at MAXjet will cause CMO's at Eos and Silverjet to rethink their efforts, and become more aggressive in pointing out their advantages and creative in presentation and positioning.  Public relations at these companies has also been notably weak.

A little go-to-market savvy might be useful, too, in making airlines such as Eos and Silverjet more compelling.  Unlike MAXJet, from which I never had a sales call, Eos is active in direct marketing and telemarketing.  Could be that Eos’ sales prospecting is differentiating enough – with only 48 seats to fill a few times a day, it wouldn’t take much of a sales effort, especially at prices that are lower than BA’s for a better service, to do the job. 

None of this is to say that MAXjet was a total loss to the business traveler; seating on many airlines’ transatlantic flights has been upgraded and the cost for business class travel has gone down dramatically even in the face of skyrocketing fuel costs. So I hope you will join Swelled Head in saying a fond farewell and thanks to MAXjet for its short but important service to transatlantic business.

With this post, Swelled Head returns after a six-month hiatus.  Sorry for the discontinuity, but we've been working on business strategy and development for our agency, Austin Lawrence Group, and can now return to Swelled Head with some regularity.  See you here again soon - and Happy New Year!

Campaign for "Little Britain"

British expat entrepreneurs Nicky Perry and Sean Kavanagh-Dowsett have launched a campaign to rename a quarter of New York as “Little Britain”. The pair own a shop and restaurants in the city’s Greenwich Village district that is home to nearly two-dozen British owned or themed businesses. Like Chinatown, Koreatown and Little Italy, they believe that the name of the area should reflect its assumed national character.

A website, www.campaignforlittlebritain.com, has been launched, tongue in cheek posters have sprung up in the area and a viral video has be uploaded onto YouTube (you can see it here - worth a look). They’ve also enlisted the support of fellow British entrepreneur, Richard Branson, who has put the weight of Virgin Atlantic behind the effort. A petition, available via the campaign website, will close on 1st May and the results will be presented to a local community board and then to Mayor Michael Bloomberg.

With a well planned campaign and the backing of a major brand, SwelledHead thinks Little Britain could be in with a chance. The major sticking point could be that, unlike the other “little nations” that punctuate New York, Little Britain is essentially a commercial gimmick rather than a reflection of immigrant heritage. That said, the area is now adopting a distinctive character that is attractive to locals and tourists alike. A commercially minded mayor like Bloomberg may well consider that this is reason enough.

One snide aside from back in Blighty – have Nicky and Sean not see the BBC comedy series, Little Britain? Its popular catchphrases, such as “yeah but, no but” and “I want that one”, have entered the vernacular. The connotations however, are hardly positive. Britons visiting New York’s Little Britain may be a little perplexed to find quaint tea rooms and fish & chips, rather than vomiting Tory ladies and Lou & Andy.

Phoenix rising for Tesco's American adventure

British supermarket success story, Tesco, has announced that the first store in its much vaunted transatlantic venture will be in Phoenix, Arizona. SwelledHead reported in July of last year, in this post, about how the company would shape its offer for US consumers.

The failures of British retailers in the US market is well documented (and the subject of a future post as I have a suspicion that the UK doesn't fare well compared with its European rivals), so while expectations run high, history looms large. What's notable is that British supermarkets are generally a step ahead of those in the US, with a far more sophisticated offering in terms of prepared foods. How the US will take to "ready meals" is the great unknown, but Tesco's record of adapting to local tastes is good.

The challenge will be selling to on-the-go US customers, the notion of an easy to prepare meal at home in place of taking a trip to a restaurant. This works well in the UK, where restaurant dining is still less part of the culture than in the US (price and quality being key factors to varying degrees). Perhaps Tesco can trade on strong US family values and position the prepared food alternative as being more homely and caring.

Gentlemen’s Tonic to Open First Franchise in Texas

London's men-only spa and barber Gentlemen’s Tonic will be opening its first franchised location in the U.S. in Houston, Texas, according to employees at the firm’s Mayfair store.  Locations in Dubai and elsewhere are to follow shortly. If you haven’t had the pleasure of a wet shave at one of London’s top barbers (or at The Art of Shaving in NY, Las Vegas, Dallas, LA or Miami), you’ve missed one of life’s great luxuries. And that’s just what GT is hoping; that high-earning professional men will come to see a shave as integral to the spa/massage experience and position GT uniquely in that fast-growing segment for men.

Already, 31 percent of all U.S. spa visitors are men. With services designed just for us, equality will surely come to this segment of lifestyle, too! Visit Julie Register's Discover Spas to see some good statistics on spa visits in the US.

I had a fantastic shave and facial at the Gentlemen's Tonic Mayfair store last December, and can report that it is a wonderful experience, and the facilities are purpose-built to make every man feel at ease.  Just the right dose of dark paneling, chrome and mirrors; not unlike the best private clubs where a gent might take these services in at home or while on vacation. 

Gentlemen’s Tonic currently doesn’t have its own line of skincare products, but with its franchisees moving in on The Art of Shaving’s turf, can that be far behind?