The market implications of safety perceptions

The MH17 and MH370 tragedies will have an immediate impact on how people chose their airline and how airlines are marketed according to Avlaw Aviation Consulting International Chairman Ron Bartsch.

“Airlines have been unable to use their safety records as a form of competitive advantage because as the travelling public are concerned, safety is a given.

“In light of these recent events, you may begin to see airlines trading off their safety record in a marketing and promotion sense.”

While there has been no decline in safety standards, perceptions matter.

“Ironically air travel is safer now than it ever has been. But in this age of information and social media, perceptions can change overnight and although those views may not necessarily be reality, they are in the eyes of the perceiver.”

Bartsch however believes that Malaysian Airlines will be able to recover from this year of horror.

Avlaw Aviation Consulting vice president Amin Hamzavian concurs with the qualification that the airline’s majority shareholder the Malaysian government gets fully behind the effort to reconstruct Malaysian Airlines both as business and a brand.

“It will depend largely on whether they will continue to back the airline financially whilst internal restructuring and reform can take effect,” said Mr Hamzavian.

Such a rehabilitation is not without precedent. After KAL 007 Korean Air Lines was able to push on, rebranded as Korean Air continuing to overhaul its image and renew its fleet in the lead up to the 1988 Olympics.