Dragonair cuts brand unit

The layoffs — the first rumblings of what could be sweeping changes to Dragonair's brand and marketing strategy — follow the airline's acquisition by Hong Kong flagship carrier Cathay Pacific. The job cuts are part of company-wide redundancies that affected almost 180 staff across a number of departments.

Dragonair's marketing operations will now fall under the remit of Charlie Stewart-Cox, Cathay's marketing GM, with Celine Ho, marketing communications manager potentially taking on the day-to-day running of marketing, along with her Cathay responsibilities. Cathay did not return calls for comment, but  Dragonair's spokesperson said: "Marketing work for all our services is now handled by Cathay. This enables synergies between the airlines."

It is also unclear what the move will mean for Dragonair's roster agencies Leo Burnett and Starcom, which picked up the airline's business just six months ago. Dragonair's adspend, estimated at US$6.4 million in 2005, has dropped considerably, say sources, with agencies tasked with tactical work.

The latest move could now deal a further blow to agencies, with sources pointing out that Cathay's dedicated McCann Erickson marketing team may yet have a bigger role to play once the new  structure is finalised. "We have had a conversation with Cathay and they are still determining how to manage communications for the Dragonair brand," noted Michael Wood, Leo Burnett Greater China chairman.

Questions also hang over the future of Dragonair's brand. Ingram Brand Company's Peter Wilken said a move to bring the two brands under one portfolio was likely. "I don't think they're going to get solutions from an agency partner, because this is more than communications, this is business strategy."