I have a new business model for airlines and challenge Virgin America, JetBlue and Southwest to test the model by offering it on some of their flights. I’m challenging these three airlines because they are my favorite US airlines and I think they are the most innovative. This isn’t a small change – it’s an industry changer. First, let me set it up.
I’m flying back from New York City after an amazing night with charity: water at their annual gala. I left a day early to be with my kids. I left quite a bit back in NYC as I’m missing FEEDraiser and an interview with Lauren Bush by leaving a day early.
Virgin America partnered with Google to provide this fancy free internet service. I love Virgin America – it’s my favorite airline and Porter Gale, CMO, is my favorite airline executive. Today, however, Virgin America cost me 5 hours away from my kids and I would like to be compensated for it. I know that isn’t going to happen and don’t expect it to but I think it should.
So here you go airlines – here’s your opportunity. It’s really simple. Offer flights at a premium of 20% and provide a 50% refund if the flight is late for any reason. If you want to get fancy then hire an actuary to run numbers such that the discount increases with the delay – perhaps ranging between 30-60%. I realize that there could be regulations that prevents this but I hope that’s not the case.
That’s it – it’s that simple, no? I would almost always pay the premium and many of my friends would also. If you want me to pitch your CEOs with you, let me know. Let’s stop making believe that free WIFI and a fancy entertainment system is industry changing. Let’s bet your financial performance on your ability to deliver. I think the airline that first adopts this model will have a huge first mover advantage and true differentiation, especially for the business traveler.
What do you think?
I wish to emphasize that the crew was awesome during the delay and that I still love Virgin America so please don’t consider this a slam. It just happens to be the event that compelled my thinking. I also want to point out that Porter jumped on twitter and moved quickly to offer to help – she’s awesome – you should follow her @PorterGale.