Subscriptions are becoming second nature for consumers, in steadily more areas of everyday life. Whether it’s entertainment, food, or communications, consumers are discovering attractive options to repeat shopping for individual products or services. More and more, they are choosing preferred, long-term providers. And companies are getting the message, not just about what consumers want, but about the advantages of becoming a preferred supplier.
Next up: air travel
Now there are signs that the air travel industry is picking up on the trend, and it could prove to be a highly disruptive innovation in the air travel industry. A recent article from the New York Times reported on the growing trend of subscription charter flying, with this headline: All you can fly, for a monthly subscription. The subject is charter travel, but the article also acknowledges the potential of the subscription model for airlines: “Some specialists predict it is only a matter of time before competition intrudes. ‘The major carriers can begin to market against it,’ said Clayton R. Critcher, an assistant professor at the Haas School of Business at the University of California, Berkeley.”
In some ways they already have. Mileage programs, loyalty perks, free upgrades, discounts, all are designed to keep the customer coming back, and not send them flying off to the competition. While all these might be attractive add-ons, they are not at the core of airline business models, and they depend on repeat customer decisions for their effect. To ride the growing trend of subscription purchasing, airlines will have to design competitive advantages into their core offerings, while convincing buyers that subscription travel means added travel value and convenience.
Supscription tickets, such as trip pass travel or unlimited travel in a given time period are just two of the tried-and-true solutions that the airline industry can adopt from the ground transportation segment. Passengers get a travel model they are familiar with, and airlines get strengthened passenger loyalty, and a stronger bottom line.
Too good to pass up
Subscription travel technology leader TravelPass is ready to help the airlines make their move:
“We have been delivering travel subscription technology for more than a decade,” says TravelPass Business Development Director David Taylor. “Our largest user has over 100,000 ticketed flyers every month on TravelPass. They were the lead partner in our development, so they were already sold on the idea when we started out.”
“Now our main focus is communicating the concept and the benefits to the rest of the industry,” Taylor says. “It represents a fundamental change in the way they do business, but because it works so well, we agree it’s only a matter of time before the idea catches on.”
TravelPass CEO Svein Therkelsen concurs: “The airlines like the idea of turning ticket buyers into travel subscribers,” he points out. “They see the value of strengthened relationships and increased loyalty. Corporations like the efficiency, and flyers love the convenience.”
In order to deliver on that all-important last point, convenience, subscription travel solutions will have to be accessible from multiple platforms. As the first mover in the field, TravelPass has all the bases covered. “The interface is fully mobile and intuitive, and up to 60% quicker to use than a standard airline web page or app,” Therkelsen confirms.
A key differentiator
While airlines tend to concentrate their market battles around pricing, subscription travel offers them the opportunity to compete on more than just price.
“The technology is 100% configurable to an airline’s specific business logic,” Therkelsen explains. “They can decide the terms for cancellation and refunds, rebooking and billing. Each airline has the opportunity to set themselves apart by defining their own unique set of parameters.”
David Taylor also wants airlines to know that adopting subscription travel does not mean committing to lengthy implementation projects: “This is not software development,” he assures. “The technology is mature, so implementation is more of a check list process, and the solution is fully PSS and GDS compatible.”
But at the end of the day, subscription travel will never fly unless it makes travellers happy. “It’s faster, more flexible, and easier, both pre- and post flight, and it can be personalised to each flyer’s needs,” Svein Therkelsen concludes. “The simplified travel claims alone could be enough to convince many travellers that this is the way to go.”
And as consumers grow ever more comfortable with subscription deals, the threshold for adopting new subscription offerings has never been lower. Look for air travel to be among the very next to tap into this rising trend.