Retail

Can Air Travel Ticketing Subscriptions Take Off?

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Travelers have purchased individual airline tickets for years, but digital innovators are allowing them to buy a set number of one-way trips ahead of time. Take Wanderift, which provides this opportunity to customers who purchase a subscription. Zachary Burau, the company’s founder, told PYMNTS in an interview that the business model has been “very, very successful in other industries.”

With his company, subscribers pay a monthly fee in exchange for a certain number of tokens. (“One token corresponds to a single one-way flight,” Burau said.) Currently, the company offers around 28 destinations based on its subscriber markets. Those subscribers can book one day to 21 days before departure and fly on American, Delta and United — “no low-cost carriers, no ultra-low-cost carriers,” Burau said. As the company wants to be as transparent as possible, it allows visitors to its website to search flights without creating an account.

If those visitors see flights that work out for them and they think the service is a good fit, he said, it “takes about a minute” to create a free account and check out the booking software on the web app. Consumers who decide to subscribe can choose between a lite plan (three one-way flights and one rollover) and a pro plan (four one-way flights and two rollovers). Wanderift is hardly the only subscription offering that offers more than one choice of plans to customers: According to the PYMNTS Subscription Commerce Conversion Index, nearly all — or 95 percent — of top performers in Q4 2018 offered plan options. When it comes to payments, the company accepts credit and debit cards.

The destinations that consumers can choose are based on their markets. Currently, the company focuses on subscribers in cities such as Austin, Atlanta, Denver and Las Vegas, and out of those markets consumers can travel to cities such as New York, Chicago and San Francisco. The company’s strongest subscriber markets are San Francisco and Los Angeles — “no surprise there,” Burau said, as those are early adopters cities. The strongest routes are San Francisco to Los Angeles and San Francisco to New York. “People love those two routes,” Burau said.

When asked why the time is right for his company now, Burau cited consistency. The problem with the airline industry — and the reason he decided to start the company — is that airline pricing jumps up and down. It’s unpredictable, he says, especially with the dynamic pricing model. With Wanderift, however, Burau says customers know they will always pay X per flight regardless of whether they book a day before their flight or 12 days and 19 days before their trips. (And that goes whether they fly New York to San Francisco or San Francisco to Los Angeles.) In terms of the company’s customers, Burau says they vary from retirees to millennials — and even some weekend warriors.

The Market for Airline Subscriptions

Wanderift is not the only company in the burgeoning market for airline subscriptions: SkyHi provides flyers with access to deals on routes that are not at capacity. The service charges customers a flat monthly fee for access. Travelers then have access to flights that leave within 10 days. When a consumer finds a flight he likes, he can book it for a fee starting at $35 — as long it is within a radius of 1,500 miles. Consumers cannot buy an unlimited number of trips through the platform, with a limitation of five one-way flights each month per a PYMNTS report last May. The service’s bread and butter is leisure travelers, especially millennials who range in age from 23 to 27.

Beyond filling empty seats, SkyHi brings airlines travelers who might spend money on other products or services. Travelers can purchase upsells with the airline, for instance, such as an extra legroom seat or extra baggage. As was reported at the time, the company homes in on shorter flights — from New York to Miami or New York to Chicago. These routes have many empty seats because of the sheer number of flights between the hubs. Moreover, any number of empty seats per plane multiplied by many trips makes for a more abundant supply.

From SkyHi to Wanderift, online travel innovators are providing alternatives to buying airline tickets for a single trip with the help of subscriptions.

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. The July 2019 Pay Advances: The Gig Economy’s New Normal, a PYMNTS and Mastercard collaboration, examines pay advances – full or partial payments received before an ad hoc job is completed – including how gig workers currently use them and their potential for future adoption.

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