It’s Friday afternoon you are about to finish work and the mood strikes. You’d love to chase the sun and head up to Cairns for the weekend. Sounds awesome right?
You jump onto the airline's website and the price to book a last minute flight will set you back almost as much as a trip to Hawaii. Reality sets in and you settle back in for a rainy winter weekend instead.
But what if there was a different option and you could get access to a seat at the last minute.
Or you could plan out regular weekend trips away that are cheap one week and a fortune the next?
Imagine if you will, a subscription model. Not too different from a home meal plan delivery. Where you pay a set amount and can pick between a menu, but in this instance, the menu is a flight to somewhere that takes your fancy within Australia.
Would you be interested in paying a yearly fee and experiencing the chance to get away without too much forward planning involved? Or to know upfront for the year how much flights are going to cost you?
We don’t have wind of any commercial airline considering this type of structure here in Australia, but a flight pass has just been introduced by TAP Air Portugal in recent weeks, so it is not entirely out of the question to be considered here.
So we thought let’s indulge for just a few minutes. What would airline subscription tickets look like if Qantas or Virgin implemented it? And would you take it up?
The Netflix of the skies
What you might not know is that there are actually some airline subscriptions like this already in place around the world. Think of it a little bit like Netflix.
You pay one fee per month and can take as many trips as you like.
The catch for most of them?
Well for quite a few of us we might need our lottos numbers to come good in order to afford it. Because the subscription model pricing is most well known when opting to travel via private jet.
One such player is JetSmarter. Established back in 2013 the app-based platform allows you to fly to and from 170+ countries worldwide. You join and pay a minimum of $15,000 a year to book seats on already scheduled private jet flights and enjoy unlimited flights of under 3-hour durations. And pay a surcharge on longer flights.
Or you can create your own flight and post it in the app so that other interested members can buy seats and help reduce the cost of the charter for that route.
Surfair is a similar subscription flights option that operates in California, Texas and parts of Europe. Offering unlimited flights with one monthly fee. The all-you-can-fly membership starts at €2076 (about AUD $3200) a month for the first 3 months for all European routes under 600 kilometres. Prime members fly all European and US routes from €3583 (about AUD $5,643) a month.
What's great about these private jet options is you can check in up to 15 minutes before take off as you avoid the check-in process that comes with commercial airlines.
How do we do it in Australia?
Airly is the closest equivalent we have to a subscription-based option here in Australia. But it operates more like Uber in that joining as a member for $19/month gives you access to book private jet flights.
The actual cost involved for the flight is paid separately each time when you make a booking. Essentially it is offering a ride share option where you share a jet to your destination to reduce costs.
An Airly membership also offers a 24/7 concierge service, exclusive event packages and a door-to-door service to save you time. Fancy huh?
While it’s great to imagine ourselves flying around the world via private jet, for the everyday Aussie a membership subscription for a private jet could be out of reach. Subscriptions flights from one of the commercial airlines would be a much more appealing option.
What would subscription tickets look like from a commercial airline?
So if it can be done in the private jet space, it’s not a huge stretch to imagine it one day being a possibility in the commercial airline space.
In fact, TAP Air Portugal over in Europe has just introduced a Flight Pass which can save travellers up to 40% on ticket purchases.
You purchase between a four to 100 journey pass that is valid for a specified period—from one month up to a year.
When you are ready to book you can choose from all domestic Portuguese flights (mainland and islands) and flights from Portugal to more than 50 destinations across Europe and North Africa, in Economy and executive classes.
One benefit they have added to the Flight Pass to make it even more appealing is that you can share your Flight Pass with family, friends and coworkers.
So how would a subscription ticket look in Australia?
Let’s imagine for a moment what this would look like if Qantas or Virgin Australia introduced this option right here in Oz.
Unlimited travel might be a stretch for everyone to get on board with (you see what we did there?). So we envisage there would likely be a number of tiers available, not dissimilar to what TAP Air Portugal has done with their Flight Pass. Where you could buy a subscription based on the number of estimated trips and cabin classes.
Something like this:
Tier 1: Up to 10 flights per year
Tier 2: Up to 30 flights per year
Tier 3: Unlimited flights per year
You would then be able to select the cabin class that you wanted to purchase for your subscription. Economy, Premium Economy, Business or First Class.
Perhaps a combo package might work for some, so instead of basing it purely off the number of flights, you could be allocated a set amount of credits throughout the year—where Economy would cost you fewer credits than if you opted for a higher cabin class.
This would help to cater for those that might have short trips where they are happy to go Economy but want to go with a Business Class option for an across country flight.
Who would take up the offer?
This type of subscription would appeal a lot to frequent flyers, myself included.
It could also be handy for businesses and business owners to know up front for the year how much their travel cost is going to be.
It would be great for those who often want or need to travel last minute. Normally flights at short notice can set you back a hefty sum, but if you have your subscription to use it could be a great option.
It would also be great for an airline based in Europe to offer. With plenty of Aussies with wanderlust frequently heading over to Europe for a gap year. For a year you could purchase a subscription for 30 economy flights throughout Europe. Making it nice and easy to consider a quick weekend getaway to Paris or Amsterdam.
How to price it?
An airline like Qantas could offer overseas travel as well as just a domestic service. Which could suit people that might travel domestically for work but like to take a trip once or twice a year overseas for either business or pleasure.
Getting the price point right based on all of these variables would be the biggest challenge that the airline would face. The appeal of the subscription option would need to be that you get value for money.
So if we were setting up the pricing we think it would need to be at a point where the total cost offers a percentage discount compared to if you purchased all of the flights individually.
How do you do this when a flight between say Sydney and Melbourne could be $79 one day and $400 another day based on demand?
That would be the tricky part for the airlines to work out. But we are sure they have access to a decent amount of data that could help inform them about how it would need to be priced.
Why would an airline do it?
With the ease of access to compare flights online, not dissimilar to the service we offer to compare credit cards, there has never been an easier way for consumers to shop around for the best deal.
Meaning most travellers don’t hold a great deal of loyalty to a particular brand. More often than not they are happy to go with the best value option.
While frequent flyer programs do go some way in driving brand loyalty, a lot of people are members of multiple frequent flyer programs these days so they don’t make that the deciding factor of who they choose to fly with.
But with a subscription-based ticketing option, the airline could just about guaranteed that the person flying, will always choose them for their travel.
So despite offering a discounted rate on the flights, the airline would likely end up better off as it delivers them a loyal customer.
But would particular airlines have enough flight routes to make it appealing?
Perhaps a more appealing option for travellers would be subscription tickets from airline alliances.
An airline alliance subscription model
One World, SkyTeam or Star Alliance are the three major airline alliances throughout the world. For us Aussies, a One World subscription model would most benefit us most as Qantas is a part of it. Virgin Australia is not a part of any of the major alliances despite having a number of airline partners.
If One World were to create a subscription ticket option suddenly we would have access to the likes of American Airlines, British Airways and Cathay Pacific making regular international travel more appealing.
We’ve seen airline alliances offer around-the-world tickets across different airlines, so the possibility of something like this is not entirely out of the question.
The biggest issue would again be the logistics around how it is priced. Given rewards points can be used across alliances partners, with an underlying pricing model sitting behind that, it would not be that much of a stretch to see a subscription ticketing model introduced.
Speaking of rewards points. How would they work in a subscription-based model?
Where points fit in
We think it would be great if you were able to use your points to pay for some of your subscriptions. Or perhaps, not dissimilar to credit card sign-up bonuses, you could get some bonus points depending on what tier of subscription ticket you choose.
For the points chasers amongst us, it would be great if points could also be earned on the flight legs that you travel. But with unlimited flights option on the cards, airlines would likely want to put a cap on the number of points that could be accumulated.
Or perhaps if you link your credit card to your subscription fee then you save an extra percentage off the subscription yearly fee, and potentially earn additional points this way too. Making it a more attractive option to stay loyal to that airline brand.
What about extra perks?
We know from the subscription offering for the private jets that some of them include additional perks such as a concierge, door-to-door service and events packages. But what perks would a commercial airline offer for their subscription flyers?
Maybe you could get a further discount on hotels booked through the airline. Or the option to select the seat you want for all of your flights in advance. Or perhaps a partnership could exist with a town car company or Uber to offer complimentary airport transfers. Maybe even travel insurance included in all trips similar to how complimentary travel insurance works with credit cards.
So which airlines do we think would implement this?
While it is nice to think about all of the places you would travel to both in and out of Australia, we aren’t so sure an Australian based airline would be the first to implement something like this.
If a commercial airline were to implement it, our bet would be that it would appeal most to low-cost carriers like Norwegian or Primera. Perhaps even Southwest.
Either way, it is a nice idea to dream about taking off at short notice and knowing that your flight is already covered.
What do you think? Would a subscription ticket from your favourite airline appeal to you?
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