Analysis

Would A Subscription Airline Model Work?

If you are anything like this author, you have several subscriptions. Netflix, Spotify, gym membership… They deliver value for customers by providing the convenience of use anytime, without having to make a purchase each time they are used. For companies, it provides a consistent and reliable revenue source that is generally not susceptible to slower periods.

Subscription airline

Who doesn’t want to fly as much as they want? Source: Pexels.com

So why don’t we have subscription models for airlines? For customers, why wouldn’t you buy a membership to an airline that just let you turn up and go? And for airlines, access to a revenue stream that is not subject to competitive pricing nor face slowdowns outside of peak season would be invaluable.

Well, turns out it already exists.

Current subscription airlines in the world

Currently, you can buy a year-long ‘ticket’ for all-business class airline La Compagnie for only $40,000. This allows you to turn up and go, flying business class from New York to Paris or Nice, France. Whilst this is very cool in theory, it is not really competitive to buying a business class ticket whenever you want to fly (the average price is around $2,000 USD, thus you would have to fly at least 20 times to get your money’s worth). Plus, with the lack of a large route network (only three routes), it does leave a little to be desired.

There are other options, however. Surf Air, a private outfit in the US, allows passengers to turn and fly on private jets across California and Texas. They do operate smaller aircraft and don’t go the distance, but the fact that it costs $1,950 USD a month for unlimited flying in a private jet (with other member passengers, although you would likely have a private cabin now and again) does sound appealing. They are currently rolling out services in Europe, so we could see this type of business model become far more popular in the coming years.

Surf Air

Surf Air could be the future of air travel. Source: Surf Air

JetBlue has attempted to implement a subscription model back in 2009. Called the JetBlue’s All-You-Can-Jet Pass! (yes that ‘!’ is part of the name), it allowed passengers to fly anywhere on the JetBlue network for only $599 a month.

“The All-You-Can-Jet Pass! gives jetsetters access to a bigwig lifestyle, with 56 destinations and more than 150 jets available at a moment’s notice,” said Robin Hayes, Executive Vice President and Chief Commercial Officer for JetBlue Airways. “Get extra face time with an important client; become a groupie for your favorite band; grab a ticket to the away games; extend summer with some extra rays in the Caribbean; take a spontaneous trip to see the extended family; or grab some genuine jambalaya or clam chowder. You can do it all as often as you like in a month without emptying your pockets. It’s our answer to the ultimate road trip.”

It only ran for a month as a promotion for the airline, however, the idea has resurfaced 10 years later in some form. JetBlue recently ran a contest for three people to win a year of unlimited travel on the JetBlue pass, only if they delete their Instagram.

JetBlue Economy

You could be sitting here as much as you want for a year. As long as you don’t tell anyone. Source: JetBlue

The last alternative is a service called Wanderift. By paying a fee (starting from $369 a month), passengers get access to three flights a month on all three major American carriers. The idea is that they will make money on the times that you don’t fly, or the price difference between flights.

What about the big carriers?

So why don’t the big carriers implement something similar?

Let’s take the example of Ryanair. They have a vast network across Europe with 439 737-800s flying daily. They would be a really attractive offering for passengers looking for all-you-can-eat travel. And it doesn’t just mean tourists. Companies and firms could be encouraged to buy travel passes for their sales team, or a single pass spread out amongst family members.

Naturally, questions would be raised; for a start, wouldn’t the pass mean cannibalizing their own sales? As Ryanair routinely offers insanely low fares for some destinations (sometimes under $50), it would be a no-brainer that they have the capacity to shoulder unlimited flying. Plus with the new passengers paying for all the extras as well, it is likely that they would see their revenue go up. The only real issue would be the price point.

Ryanair

Ryanair operates a huge fleet of 737 aircraft across Europe. Source: Ryanair

Ryanair would need to look at charging $599 USD at least (like JetBlue above). It would be a cost that would price out sensitive passengers, but cheap enough that it would be useful for firms and other groups.

What do you think? Let us know in the comments below. 

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