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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