Subscription air travel from jetBlue

August 13, 2009

jetBlue shakes it up once again. The airline business – an industry filled with impenetrable pricing schemes, a continuous stream of bankruptcy filings and scores of fees for previously complimentary services – has long shown signs that the incumbent business model is a relic of another time. Consumers (and ever-tightening business customers) demand transparency. The airline industry is anything but. Perhaps, that is, until today. In what is currently a limited time promotion, jetBlue is offering customers “All-You-Can-Jet” for travel beginning next month.

Subscription airline service. Brilliant. At the high end, the private jet timeshare model (i.e. NetJets) has proven successful – and leave it to jetBlue to figure out a way to bring that concept down to a very accessible level.

Sure there are some fees for changes and cancellations and there is some straightforward fine print to work around – but at $599 for all you can fly across much of jetBlue’s system for a month, this is a great deal. And it is also, obviously, a radically different approach to how the market thinks about air travel. If this promotion works, jetBlue will likely ‘lose’ money over the course of the one-month effort. Most folks who will buy in to this promotion will likely fly more than they would have had paid full freight for every leg of the flight. But does jetBlue really lose anything here? The planes are flying anyway. There are a handful of assorted fees for variable costs that will still apply – like baggage fees and on-board fees, etc.  And, they’ve likely built or strengthened relationships with tons of consumers.

All-You-Can-Jet aggressively encourages use of jetBlue’s product with the full confidence that the experience will create brand loyalty. And imagine if a subscription pricing tier became part of the jetBlue portfolio. If jetBlue could get people to pay a flat fee up front for X number of flights or for unlimited flights within a certain time frame, this becomes a brilliant way to amortize costs of each flight. A more reliable revenue stream may help offset costs across the entire system, enabling the standard one-way fares to stay competitively priced. Considering the logistics and safety concerns of air travel, it is unlikely that stepping onto a plane will ever be as simple as stepping onto a commuter train – yet within these constraints, jetBlue offers a game-changing model that may finally enable mass market air travel to live up to its storied promise of making the world smaller.

Where does brand fit into this? Well, pretty much everywhere. If one of the majors did this, you’d expect to be buried in fine print, tack-on fees and blackout periods. If a brand like Southwest did it, connecting flights and a more limited footprint would limit the possibilities. Who else but jetBlue could even begin to think about this kind of thing? jetBlue is the brand that makes flying easy – and what could be easier than effectively removing the ticket-buying process from the equation? All-You-Can-Jet is an inspired business decision fueled by a superior brand. And, if it works, the rickety old airline pricing engine may find itself getting an overhaul – thanks, once again, to jetBlue.

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