Wednesday, May 23, 2007

Flexibility = value

We love all that we do, this includes air travel. Low-cost airlines gave passengers a great deal of flexibility in offering one-way fares. We were forced to purchase a round-trip ticket in the same class with traditional airlines. This allowed them to generate extra revenue. Restrictions were bad for consumers but good for least on the revenue side. LCCs changed that. SAS has been very innovative and had success with their one-way concept which allows passengers to book tickets either one-way or round-trip in different classes. Now JetBlue wants to test refundable fares. They stress that their main hold-up is technology, which is only a matter of sitting down and working out the coding. This will attract even more corporate travellers because many corporate travel policies do not allow business travelers to book non-refundable fares. Corporations may pay more for their refundable tickets, but they make up for this in the flexibility that are offered. JetBlue does allow passengers to switch names on tickets but now want to take that a step further.

Not only that, but JetBlue is considering a virtual first class. I love it. I love the name, the concept, the idea, the challenge. Of course, I don't know how likely it is to work, but just the thought of creating such a concept is a great move. JetBlue must have a great learning capacity to learn from its experimentation and trials; what a great way to capitalize on innovative thoughts. The airline wants to create the possibility for travellers to purchase a window or aisle seat with an empty middle seat. In other words, give passengers a little more breathing space by ensuring they have no one next to them. All this for a small fee. This isn't the first time this has been done. SAS had a similar concept. JetBlue is thinking about offering it on low load-factor days, such as morning, weekday flights, when business travellers are more likely to travel and loads are light. A great way to challenge the competitors, a novel idea, and I wish them luck.

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