Tuesday, February 9, 2016

All You Can Fly, for a Monthly Subscription

            Over the past several years, several traditional markets such as taxis and media creation have been overtaken by companies like Uber and Facebook, who own no taxis and create no content, respectfully, but rather interface with customers directly, allowing them to pick and choose the product and content directly.  This is exactly what companies like Rise and Beacon are doing to the traditional airline industries.  Through a subscription bought online or in-app, these companies allow faster and more convenient travel without actually owning any aircraft.  Rise and Beacon lease out aircraft and allows unlimited flights for around $2000 a month.  According to Beacon co-founder Wade Eyerly they are a “sales and service company”, as they don’t partake in any of the actions usually indicative of a carrier, like employing pilots, doing maintenance, and having inventory.  Basically, this is Uber for airfare, as passengers are expected to save about an hour each way without having to go through the traditional airport experience.
            Beacon and Rise are excelling because they don’t own inventory.  This cuts down on their overall costs, and allows them to focus more on the customer relationship aspect of their business.  This seems to be the way most business are going these days, with either no inventory like Airbnb or Beacon, or very limited like Tesla.  Technology is being utilized especially in the service market.
            These companies are also relatively cheap, if you are a frequent flyer.  Without this subscription, airfare is usually $400 dollars for a flight from New York to Boston.  The online subscription starts to pay for itself after around three or four flights.  A firm can actually buy it’s own subscription for it’s employees, greatly reducing the costs of business oriented travel.
            Third, a subscription like this greatly reduces the time it takes to fly.  Traditionally, Boston Logan Airport recommends arriving two hours before departure.  With a seat reserved through Beacon, a customer could show up to the airport fifteen minutes before takeoff.  This is probably the biggest selling point of these services, as nobody wants to waste time in an airport.
            Right now, this service is oriented towards frequent flyers, but there is no mention of trying to get into the infrequent flyer market.  If companies like Beacon and Rise could break into this market, there is a lot of money to be made, as infrequent flyers are willing to pay more per flight.  This clashes with the subscription based model, but is still a viable market to branch into.
            Customer relations fostered through technology and user interfaces and a custom made or limited inventory are the present and future of the service industry.

Zipkin, Amy “All You Can Fly, for a Monthly Subscription” The New York Times Oct. 2015. Web. 9 Feb 2016 http://www.nytimes.com/2015/10/27/business/all-you-can-fly-for-a-monthly-subscription.html?_r=0

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