With the introduction of Continental into the Star Alliance now given the nod by the U.S. Department of Justice, Star’s rival and Continental’s former alliance, SkyTeam, is restructuring and, by year-end, will more closely mirror that of other both Star and OneWorld.

Chair Leo van Wijk cited the changing industry for the reorganization adding the alliance needed a structure that would make it more flexible to adapting to those changes.

The group is centralizing its various marketing, finance and administrative tasks under Air France Marie-Joseph Malé who has become the managing director of the organization which will have its own employees rather than a committee of the now nine-member airlines handling each function. The new management and support organization, as it has been described, will be headquartered in Amsterdam.

The reorganization is part of a broad membership recruitment program taking it beyond Aeroflot, Aeroméxico, Air France, Alitalia, China Southern, Czech Airlines, Delta/Northwest, KLM, and Korean, its main members and Air Europa, Copa and Kenya Airways, its associate members. It is focusing on Southeast Asia, India and Brazil.

The Romanian airline, TAROM, is on track to join the SkyTeam alliance as an Associate member later this year and is now making progress with its sponsor, Air France, towards joint IT commercial systems and FFP.

The question then becomes whether or not it will be enough since one of the biggest challenges for these alliances is branding, according to Nawal K. Taneja, who told Aviation Today’s Daily Brief that airlines are schizophrenic about branding in wanting to keep their own identity. Related Story

The problem is reminiscent of the conundrum faced by the regionals who wanted to keep their identity when they began the code-sharing trend in the 1980s. But, as now-defunct Air Midwest put it, the only thing worse than code-sharing is not doing it. The U.S. airlines forced their regional counterparts to suppress their own identities in favor of their mainline partners whether or not the mainline carrier assumed ownership. So it is interesting that now that the tables have turned, that they do not see this schizophrenia as a problem.

“Mergers and alliance partnerships make it difficult to portray a particular brand image and attributes when different parts of the airlines network and products are actually serviced and delivered by other carriers/vendors,” he said in his latest book, Flying Ahead of the Airplane. “In some cases, experienced travelers view code-sharing agreements as simply sub-charters to regional carriers. According to many frequent flyers in intercontinental markets, many airlines ruin their own brand promise by code sharing with inferior airlines. This is the case for a number of European airlines with excellent brands who dilute their brand in this way, but less true for U.S. airlines who tend to have a poorer brand in the first place.

“Passengers crave honesty and straightforwardness,” he continued. “They identify with the values portrayed by brands and look to brands as a promise that their needs will be met. Some experts, in fact, believe that ‘rendering authenticity’ could easily become as important as controlling costs or improving quality, and since passengers want offerings that are real, some experts maintain that the management of the customer perception of authenticity could become a new source of competitive advantage.”

He called branding vital to the airline industry and noted that the top 100 global brands do not contain one passenger airline. “This is especially problematic in the new passenger world where,” said Taneja, “airlines have far less control over passengers. This is due mostly to the fact that consumers now are able to search, converse and collaborate. This new marketing environment can also present an opportunity for airlines to present offerings that not only satisfy, but even more importantly, to anticipate the needs of their targeted segments.” He pointed to the role of social networking and word-of-mouth trends.

“Studies show that traditional advertising is on the decline, while world-of-mouth advertising is on the rise,” he said, adding that restaurants and hotels are already benefiting from this. “According to the firm BIGresearch, word-of-mouth is currently the most influential media on purchasing decisions among all age groups. Given this evidence the airlines industry must find a way to capitalize on this extremely powerful channel.” He concluded by saying that airlines, with the exception of a few such as Southwest and JetBlue, have yet to take advantage of this marketplace.

“One of the keys to building a successful brand is to differentiate yourself, then ensure this differentiation is meaningful or relevant to others,” he said. “As with differentiation, if an airline offers a unique feature that passengers do not value, its brand will not be able to command a premium price. Based on the ‘sameness of brand,’ one can only conclude that manay airlines appear to have overlooked the point as to what passengers really desire, making some airlines’ offerings irrelevant.

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