Airline Subscription Plans Could Be Blueprint for Travel Industry Recovery, Loyalty

Airline subscription plans aren’t new — JetBlue’s All-You-Can-Jet Pass sweepstakes leaps to mind, as do plans like American’s AirPass that offers fixed-rate fares, VIP access and more for $10,000 per person, per year. Private jet subscriptions make that sound like a bargain.

Cracking the code on a sensible, affordable airline subscription program for the mass market is proving difficult for major carriers, making Alaska Airlines’ new Flight Pass offering unique.

Announced Feb. 16, the airline said “subscribers can choose between two annual plans — based on the best value or most flexibility — that differ only in the length of the required advanced booking time. Subscribers will receive credits deposited monthly or bi-monthly into their Flight Pass account, to be redeemed for 6, 12 or 24 nonstop trips a year to eligible destinations.

“Flyers are still required to pay applicable government taxes and airport fees on each flight, in addition to the monthly subscription fee and nominal fare (most flights the fare is only $0.01).”

Plans include the value-based Flight Pass starting at $49 per month, and the flexible Flight Pass Pro starting at $199 monthly and allowing “same-day booking up to two hours before departure, and as early as 90 days in advance.” Cards are debited monthly for 12 months.

Speaking with PYMNTS, Alex Corey, managing director of business development and products for Alaska Airlines said, “Since the start of the pandemic, subscription offerings have gained incredible popularity.”

“According to recent studies, people are looking to travel more often in 2022,” he continued, “with 76% of American travelers in a ready-to-travel state of mind, and nearly 50% saying that travel will be a high priority in their budget over the next 3 months.”

Noting that Flight Pass is responding to travel trends particularly in western U.S. markets served by Alaska Airlines, Corey said, “We’ve seen demand from our leisure travel guests in California and developed Flight Pass to meet their needs. As the only West Coast-based airline, California remains one of our priority markets.”

He added, “With 100 daily flights to 13 California airports and additional frequency between California and Reno, Phoenix and Las Vegas, Alaska Airlines is uniquely positioned to serve guests looking for more frequent and affordable travel in 2022.”

The Flight Pass offering focuses on pricing and passenger recognition, which has been observed throughout the pandemic-era subscription economy.

According to PYMNTS 2021 Subscription Commerce Conversion Index, 49% of subscribers “say they subscribe to brands directly because they offer better pricing, for example. There also are 46% who subscribe to brands directly for better customer service and for better access to product-specific discounts and coupons.”

See also: Alaska Air Launches $49-Per-Month Flight Subscription Program

Timing Is Good for Travel Subscriptions

Using the Caravelo travel subscription platform to manage the backend of Flight Pass, Corey told PYMNTS that the program is designed to optimize loyalty at a pivotal time in travel.

“Everything travelers have come to love about Alaska Airlines stays the same when using Flight Pass,” he said. “Free main seat selection, earn a mile for a mile flown, flexibility to change plans, and full elite and credit card benefits. Our Flight Pass website offers all the functionality that matters most to members.”

He added that hosting by Caravelo “enables guests to register, trade credits for tickets and manage their Flight Pass account. Seat selection will be integrated into the site in the coming weeks, however, there is no near-term plan to fully integrate” with its website or app.

As major carriers reconstitute, much of the action lately is in regional and budget airlines.

On Feb. 7, Spirit Airlines and Frontier Airlines agreed to merge, stating that “the stronger financial profile of the combined company will empower it to accelerate investment in innovation and growth and compete even more aggressively, especially against the dominant ‘Big Four’ airlines, among others.”

The Big Four — American, Delta, Southwest and United — have toughed it out through successive travel freezes caused by COVID, and they struggled through the end of 2021, with American Airlines reporting a loss of $931 million in Q4 2021.

The New York Times reported that, “Over the two weeks starting on Dec. 25, American canceled just under 1,500 flights, compared with more than 4,300 at Southwest Airlines, more than 2,500 for United Airlines and more than 2,000 for Delta Air Lines,” all blamed on omicron.

Against that backdrop, Alaska Airlines’ Flight Pass subscription is designed to hold appeal to West Coast travelers especially, with a plan that Corey said is one of a kind.

“There may be some similar sounding products, but there are some fundamental differences,” Corey said. “Alaska’s Flight Pass is the first pay-as-you-go subscription product with fixed pricing in the U.S. It was designed for West Coast flyers who are looking for affordability, convenience and ease of use.”

He added that, “In contrast, another airline offers a pre-paid exclusive membership program targeting a niche premium audience with a minimum buy-in of $10,000 per member.”

See also: Travel Sector Eyes Expansion as New Brands, Services Take Flight