In these hard times, the income of air companies is being reduced, fundamentally on account of the drop in worldwide demand ever since the attempts of September 11 last year, but also because of the strong increase in insurance policies and additional security measures. Thus, it is not surprising to see the marketing people in these companies straining their wits to generate new sources of income.

The clearest examples in this respect are, on the one hand, the recent agreement between the Sky-Team Alliance members and the Coca-Cola soft-drinks company, and on the other, the Varig initiative to offer the fuselage of its aircraft as advertising space.

Delta Air Lines and the Coca-Cola Company informed about a new strategic marketing eight-year agreement that will supply the clients with new promotions and an increase in the offer of products.

The two companies are in this way enlarging their 70-year-old relationship, in order to offer the various products of the Coca-Cola range exclusively to the airline passengers, besides making an effort to consolidate both brands at world level.

It is to be emphasised that this pact is part of a larger-scale agreement between Coca-Cola and the Sky-Team Alliance, the first in its category to be drawn up between a world alliance of airlines and a soft-drink company.

The alliance of Sky-Team with Coca-Cola is supported by individual agreements between the member airlines of Sky-Team (Aeromexico, Air France, Alitalia, CSA Czech Airlines, Delta Air Lines and Korean Air) and the local bottling companies of Coca-Cola.

Thanks to these agreements, 220 million passengers will enjoy the Coca-Cola products annually, on over 8,200 daily flights of the Sky-Team Alliance. Promotions between Sky-Team and Coca-Cola will be strengthened, while increasing the international exposure of both Coca-Cola and Sky-Team.

In order to facilitate the signing of the agreement, Air France, third largest airline in the world and member of the alliance, opted for Coca-Cola as its main supplier of soft drinks. Over 40 million passengers from the French company drink about 15 million litres of soft drinks, water and fruit juices annually.

The other five member airlines of Sky-Team, which at present offer products of the Coca-Cola line on their international flights, will increase their variety of the company’s products.

For rent: Fuselage Space

On the other hand, Varig, the largest Brazilian airline, announced that it intends to rent the fuselage of its 87 planes to commercial sponsors that wish to use the space for advertising, as AIR MARKET informed in its last issue.

Roberto Macedo, commercial vice-president of Varig stated that the company hopes to bring in some 10 million reales (approximately 4.3 million dollars) annually by renting fuselage space to commercial firms.

Macedo abstained from informing the amount collected last year by the company for the rent of some inside space on the planes to advertisers.

Varig informed that it expects a growth of between 7 and 10% in its domestic flights as from next July and between 10 and 15% for its international traffic.

To reach such a growth, increase the use of the planes and raise productivity, the Brazilian airline is restructuring its routes and frequencies.

Until September 2001, the company piled up losses for 608.3 million reales (some 260 million dollars), almost three times as much as the losses it registered in the whole of the year 2000.

The situation deteriorated in the last quarter of 2001 as a consequence of the terrorist attempts of September 11 in the USA, while the company’s debt climbed to over 1,000 million dollars in December.

At the end of September, the airline fired 1,700 employees, equivalent to 10% of its entire staff and returned 13 planes it had taken on lease.

It is to be supposed that in case this initiative turns out to be a success for Varig, the other companies will follow suit promptly in this creative marketing measure. Very likely in the near future advertising will not only decorate streets, highways or the façades of buildings, but it will also fly the open skies on the fuselage of commercial aircraft.