Ian Butterworth was on a plane to Jakarta. As the plane took off, Ian began to settle down and reach for the seatrecliner button so that he may sit back and get some shuteye before the hustle bustle of the city sweeps him away. After a few seconds of fumbling, he realised there wasn't such a button. He was on an Air-Asia flight, the lowcost carrier. The cheerful and clean cabin was orderly and comfortable but sans frills such as the seat recliner.

Ian, a finance director in a mid-sized multi-national company decided to start flying budget airlines in an effort to motivate his senior management to do the same. At the end of his trip I met up with the fellow and asked him how he had found the flight. He remarked that it was much better than he had expected and remarkably better than his experience on a recent Malaysia Airlines flight to Singapore. I asked if he would choose Air Asia over Malaysia Airlines the next time he had a choice, assuming the fares were the same, and he said he would. I was a little surprised.

I decided to explore how people view the two brands, particularly given the recent announcement by Air Asia chief, Tony Fernandes, that the country's two largest airlines have agreed to swap shares and start collaborating in a bid to reduce competition and cut costs in one of Asia's key economies. What might be the implications of this arrangement between the two companies with regards to brand perception, particularly when they want to interchange brands, like in the joint sponsorship of EPL team Queen Park Rangers?

Y&R has recently completed a major study, Generation Asia™, the most extensive study of Asian brands in the marketplace today. The data reveals some interesting perceptions. For example, people perceive Air Asia to be a much more differentiated and relevant brand compared to Malaysia Airlines.

This isn't particularly surprising, given that Air Asia and in particular Tony Fernandes focus a lot of attention on the innovation driving the brand. However, Generation Asia also measures brands on 48 qualitative attributes to identify the areas where a brand outperforms/ underperforms against the competition.

And it's these attributes which really drive the industry and consumer brand selection. For these two brands the results on some key attributes were:

The results reveal markedly different attributes for each brand. And while these results may not be particularly surprising, who will emerge victorious in the brand stakes as a result of this partnership? Will MH actually fly higher because of the positive associations of Air Asia or will MH drag Air Asia lower? If we look at history to see how brands with this kind of opposing brand patterns impact on each other as a result of mergers or even just close working relationships, the prognosis is often bleak:

HP and… well, any brand really:

First it was Compaq, the dynamic PC brand that disappeared once HP took it over, and then it was the turn of Palm, which also sank without a trace. The final coup de grace was when HP killed HP itself, which was probably the most innovative thing to come out of HP in a decade.

Ford and… well, any brand really:

Volvo, Jaguar, Land Rover, Mazda - the list of brands run over by Ford is long and illustrious. Of course today, Ford is a much stronger brand and seems to be the only American auto brand with potential. And this is thanks to their focus on the consumer and attempts to really innovate their cars.

... What might be the implications of this arrangement between the two companies with regards to brand perception, particularly when they want to interchange brands, like in the joint sponsorship of EPL team Queen Park Rangers?...

Time will tell how the Air Asia/ Malaysia Airlines story will pan out. The challenge for Tony Fernandes will be to learn from the experiences of past brand alliances and look to maximize the best of both brands by focusing on the customer experience and product innovation.

By Hari Ramanathan, Regional Strategy Director, Asia, Y&R