Can an all-you-can-fly airline possibly work?
Apr 13th 2012, 15:41 by N.B. | WASHINGTON, D.C.
SURF AIR, a Californian start-up, has a novel business model: for a monthly fee you can fly with the airline as much as you want. Is buffet-style air travel the wave of the future?
JetBlue and Sun Country Airlines have both already tried offering all-you-can-fly passes, but so far no carrier has built its business model exclusively on a buffet plan. The idea isn't bad, but some scepticism is warranted. At $790 a month, Surf Air's flying plan will probably only appeal to business travellers who often go to the same places and rich Californians in long-distance relationships. Will that customer base allow Surf Air to make a profit? Maybe: 20m frequent flyers jetted between San Francisco and Los Angeles in 2011, according to the company's numbers. The airline plans to launch with service between Palo Alto, Monterey, Santa Barbara and Los Angeles, but it still needs to secure regulatory approval, according to a company press release.
Frequent flyers make up a huge portion of the business-traveller population, and almost every airline relies on business travellers to get (and stay) in the black. There is surely some group of private-jet-sharing business travellers who might be attracted to an all-you-can-jet airline as a cheaper alternative. A lot will depend on how many flights and how much convenience Surf Air can offer, and how quickly it can expand service. The company's promises certainly seem attractive:
[Surf Air will offer] its members 30-second booking and cancellations, travel to and from uncongested regional airports, and an easy arrive-and-fly process with no hassle, no lines and no extra fees.
It's easy to make promises, though. It's much harder to run a profitable airline. As Gulliver often notes, the American airline sector overall has never really made any money—in fact, total earnings over the entire history of the industry are minus $33 billion. That, of course, suggests that existing airlines might be doing it wrong. Maybe all-you-can-fly really is the way to go. It's at least worth a shot. I'll be eager to see what people think of the final product—assuming regulators give the go-ahead.
Surf Air: Can an all-you-can-fly airline possibly work? | The Economist