Could a new air ticketing idea overshadow FFP miles?

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By: Wise Marketer Staff |

Posted on May 16, 2005

Could a new air ticketing idea overshadow FFP miles?

A new idea from intellectual property development firm Rothschild-Landry, called 'AirShare', has been created with the aim of changing the way air travel is booked - particluarly by business travellers - but what implications will it have for frequent flyers and the major FFP operators?

According to Rothschild-Landry, commercial passenger airlines are continually struggling with financial losses made worse by rising fuel costs and ticketing price wars. But at the same time business travellers flying on short notice with relatively inflexible schedules are also paying more than leisure travellers for the same flights. And this is where the battleground will be: the frequent business traveller.

The patent-pending AirShare idea was designed to provide extra cash for the major carriers while allowing business travellers to pay less for flights and creating a new revenue stream for travel agents and flight resellers.

Airline timeshares The company's idea is simply a new method of selling seats on commercial flights: Inspired by the concept of timeshares in the real estate industry, AirShare will allow airlines to pre-sell fully negotiable and transferable credits, or "AirShares", to be used as full payment for seats on flights. According to Jesse Rothschild, president and CEO for Rothschild- Landry: "Every major airline has seats that sit empty for hundreds of thousands of miles each day. But airlines and resellers offering AirShares can sell customers - primarily business travellers - the right to use those seats in advance, and in bulk."

Although AirShares are actually equivalent to purchased flight tickets, they stand to give their users more flexibility. Unlike many conventional air flight tickets, airline-issued vouchers, frequent flyer miles, and loyalty rewards vouchers, AirShares are honoured without penalties or blackout dates, they're transferable, and they can be used at any time within a specified period. The traveller books their flight as usual but, instead of paying with a credit card, they redeem AirShares.

What it means to loyalty Rothschild added that the benefits to business travellers and airlines would be numerous: "For the business traveller, AirShare would lower overall costs, provide predictable flight costs, provide greater flexibility in flight scheduling, and spread flight costs over a range of time. Likewise, the airline selling AirShares would increase near-term cash flow, benefit for useful planning data, increase their customer retention, more easily secure market segments, and lower their costs."

Reselling AirShares would also present a new business opportunity: Online and bricks-and-mortar travel agents will be able to sell AirShares for specific flights or as part of package holiday deals, while cruise lines can bundle AirShares with cruises for all-inclusive packages. Businesses, on the other hand, could even use them as rewards or incentives for employees, or as prizes for customers. But most significantly for the loyalty industry, loyalty programme operators can add AirShares to their range of rewards, allowing almost any points-based loyalty operator to provide flexible, blackout-free air travel as an aspirational prize.

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