Flying higher - US Airways

The morning of Feb. 17, 1997, Mike Manclark, president of Greenville, Miss.-based Leading Edge, a company that paints about 300 commercial airliners each year, asked his crew to haul a Boeing 737-300LR from its hangar. As aircraft 521 was being ferried out to the tarmac beneath a ceiling of high whispy clouds, Manclark and two others -- US Airways vp of marketing and distribution systems Rita Cuddihy and Vince Carra of San Francisco corporate identity firm Luxon Carra -- each fretted silently. The sun seemed to slash through the light cloud cover and brighten as the ground crew tore off sheets of paper covering the aircraft's skin. The burning question was how successfully Luxon Carra's artistic renderings of the airline's new logo colors would translate onto a real aircraft in the harsh light of day. Months of preparation and creative development boiled down to a moment of truth because there was virtually no time to fix things if theywere not right. When recently installed Chief Executive Officer Stephen Wolf introduced the changeover from USAir to US Airways, would the dark midnight blue of the logo look black under the day's light conditions? "It's sort of like handing someone a line drawing on a piece of paper and saying, `There now, make Coke's contoured bottle from the drawing,'" said Manclark, who's been in the specialized aircraft painting business for 13 years. "Colors on paper aren't necessarily the same when you put them on the metal panels of a plane. And when you think you've got them just right on the plane. you've got to think again because you're inside, under florescent lights, and being outside in natural light on the tarmac makes the colors look entirely different. We all drew a sigh of relief when we saw midnight blue."

The colors of a logo can be crucial to a corporate image makeover. But it is by no means an end. US Airways is among a growing number of companies who have thrown in the towel trying to solve their branding questions and dilemmas through traditional advertising methods and simple graphic makeover. Branding for the 21st century, practiced by too few companies today, involves a top-to-bottom re-examination, understanding and delivery of what makes their brand what it is, and what makes it breathe.

Wolf, who took over as chairman/ceo of USAir in 1996, brought with him an imposing ego, a wealth of major airline leadership experience from his days as head of United Airlines, and a masterful sense of a chief executive's impact on one of branding's key balancing acts: actual change versus perceived change.

The USAir to US Airways repositioning, not even midway through its five-year change program, serves as a classic example of the critical role of synchronicity in weaving internal and external marketing communications into the process of fundamental product improvement.

Wolf's task is simple to understand, but hard to pull off. The immediate and longer term future of the airline depends on leveraging its dominance as a short-haul carrier in the Northeast into becoming a force in international business travel.

"You either had to do it completely, and with confidence, knowing that you were going to get to a world-class level, or else not bother going through the motions," said TWA's head of marketing Don Casey, who in 1996 and the first part of 1997 put together a partnership between Luxon Carra and New York-based Deskey Associates to develop imagery and execute the corporate identity designs the re-branding program. "Steve knew there was no half-way, and that he couldn't effect the important basic operational, financial and organizational changes without effecting perceptual changes. They were inter-dependent."

Since Wolf announced to the world on Feb. 27 that USAir would from then on be known as US Airways, about 25% of the carrier's fleet of 250 aircraft have undergone the livery makeover at Greenville, giving the planes their look of midnight blue over a medium grey belly.

"In the airline business, especially among business travelers, bigger is always better," said Scott Yaw, managing director of Deskey. "Before the change, you would look out at the tarmac and see USAir 757s lined up with United's, Delta's, Northwest's, and you'd think, somehow, the USAir planes looked smaller and dirtier because of their poorly-matched skin panels. With the new livery, the aircraft takes on that bigger look."

The bigger-is-better notion evolved out of Wolf's initial months of reckoning with USAir's market position in 1996. The airline had lost $685 million in 1994, crept out of the red in 1995 and achieved modest profits of $263 million in 1996. In spite of its strengths in East Coast market routes, the airline had reached a crossroads, needing to decide whether it was going to go into the profitable long-haul international business travel market or fight it out in the low-margin short-haul marketplace.

"When [president & coo] Rakesh Gangwal and I came here in early 1996, we spent some amount of time analyzing every aspect of the airline -- financial, operational, strategic," Wolf told Brandweek. "We found a company more troubled than we had imagined. Here was one of the largest airlines in the world, astride one of the richest route systems in the world, with an image [held by its customers as well as employees] as a regional carrier. There was, and is, no room in this business for a $7.5 billion regional carrier. That had to change. We needed to become bigger or smaller, and the preferred choice by far was to become a bigger, high-quality airline."

The partnership of corporate identity firms Don Casey cobbled together to work with Wolf's team at USAir included Luxon Carra, the two principals of which had worked with Casey at Landor Associates on a number of airline identity assignments, and Deskey, which had no airline experience but was deep in the area of consumer product design and packaging. Early on in the repositioning process, USAir senior management and a team from Deskey and Luxon Carra focused on a nine-word palette of characteristics and values from which the new visual and verbal communications would spring: safe, professional, consistent, orderly, predictable, reliable, crisp and clean, tasteful and contemporary and understanding.

Critical to Wolf was the management of change, inside out and outside in. For nine months leading up to the Feb. 27 US Airways unveiling, he involved himself in the minutia of pantones, typefaces and fabric stitching. "For an airline, and for a service company, the marriage of substance and image is of great importance," he said. "So I took a close personal interest in the process, working closely with our team."

As involved as Wolf was in the components of the image makeover, he managed not to get in his own way, and hardly blinked when his corporate identity team strode into the company's Arlington, Va. headquarters during the late summer of 1996 with 50 new logo options, all of them pointing to one of the biggest changes imaginable, a new name.

Wolf didn't hesitate on the new name because it literally incorporated the equities of the old one and the new one. And, with its American flag logo, a statement is being made that its days as exclusively a short-hop carrier are over.

"Prior to that decision, USAir had fallen to probably its lowest position ever in the marketplace, so in terms of the stored up equities in the name, there was almost zero risk in making the change," said Martin White, vp/marketing programs and services at US Airways. White and others point out that the thing that made Wolf most nervous was not the name or image changes, but the airline's ability to deliver on the promise of those changes.

Industry observers estimate that the three-to-five-year rebranding campaign will run to about $35-40 million in costs to change all US Air imagery to the new US Airways identity on items ranging from rock glasses and cocktail napkins to uniforms and the aircraft livery.

Still, airline officials point out that many of those dollars would be spent in maintenance and materials replacement anyway, and although the physical identity makeover involves hundreds of thousands of items that need to change from the old name to the new, the changes to the organization have been far more profound than those visible to the naked eye.

Merrill Lynch analysts Candace Browing and Michael Linenberg outline a run-on sentence of these changes in a March 3 report to investors: "Significant changes since the new management team arrived include closing two reservation facilities in Greensboro, Winston-Salem and Roanoke by the June quarter of 1998, the acquisition of US Airways Shuttle, the elimination of unprofitable jet service to nine cities, a reorganization of the management structure, the termination of the British Airways code share alliance, the transition to the Sabre network, the introduction of Airbus aircraft into operations, the introduction of a power-by-the hour engine overhaul contract, the valuing of the carrier into the #1 on-time position among of the five largest carriers, and last -- but certainly not least -- a cost competitive pilot agreement. As a result of all these actions, as well as a generally favorable industry pricing environment, the company reported an operating margin of 9.8% in 1997 (this includes all one-time items), which is more than double the company's 4.3% operating profit margin for 1995."

Other measures that Wolf's change imperatives are kicking in: US Airways flew 41.6 billion revenue passenger miles and 58.3 billion available seat miles in 1997, an increase of 6.8% in RPMs and 2.5% in ASMs over 1996. The average load factor for 1997 was 71.3%, up 2.8%, while the break-even load factor for the year was 66.4%.

"We have made enormous strides in terms of operational integrity, financial performance, customer perception," said Wolf. "All you have to do is look at the Department of Transportation measures for on-time performance, fewest bags lost, consumer complaints. We have moved from the middle of the pack to the top, a tribute to our employees. Financially, the results speak for themselves. And the fact that our load factors are setting records regularly says something about how customers view us."

The impact of establishing a clear brand mission for a company is critical to a service business because, as countless studies show, employees become more motivated and hold themselves to a higher standard of performance if they understand what the company is trying to do and are empowered to take part is what a brand stands for.

Marketing consultant Dennis Keene, who has worked with auto and financial services companies says, "One of the fastest ways that a troubled company or brand can be turned around is when the communication of a brand is upgraded, and the articulation of the brand is made substantially better." Said Keene, "For employees, as well as consumers, the brand becomes a club to which they want to belong."

From some consumer perspectives, however, change is happening at a slow pace. US Airways ranked slightly below average in both 1996 and 1997, according to J.D. Power customer satisfaction ratings.

"The payoff of the image change will tend to lag some of the more substantive changes the airline makes," said J.D. Power analyst Tim Gohman. "When we see whether they move the needle this year, it'll be an indicator that their programs are really kicking in."

Wolf feels he has struck a healthy balance between the real changes and the perceived changes at the company. "I've painted a lot of planes in my time," Wolf said recently, standing at the window of his offices, looking out toward aircraft taxiing to and from the new terminal at National Airport in Washington D.C. "I think I've finally gotten it right."

COPYRIGHT 1998 BPI Communications, Inc.
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