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The Ascent of Airline Subscriptions

The frequent flyer program has been around in the airline industry for ages. If you’re frequently traveling and not collecting miles with this program, you’re not doing it right. Unfortunately, the two biggest airlines in India that were significant participants of this program, Jet Airways and Kingfisher, went under. So what’s the future then?

Since most businesses are going the subscription way, why should airlines stay behind? The pandemic hit the aviation business pretty bad, and if there’s one strategy that can help the players revive, it’s this.

The Ascent of Airline Subscriptions

Covid-19 led to more flights coming to a halt and witnessed more cancellations than ever. The airline industry was engulfed in losses. The exorbitant parking charges at major airports didn’t help. A small glimmer of hope was all that was needed, and it came about in the form of the subscription model.

Companies like Volaris, Air Canada, and others had started with this model long before the global crisis. But 2020 interested more and more players to follow suit. When Volaris started out with their subscription program called v-pass, they had signed up around 30,000 flyers, for a year, who could undertake one domestic trip a month for a fixed price. It would be cheaper for the flyers who would travel every month and make money for the airlines for all the months they would miss.

Challenges with this Model for the Airline Industry

The airline systems were not built to accommodate the subscription model. As a result, their existing technology and operations are not equipped to handle this new development at scale.

Another challenge that the airlines face is pricing. No optimal solution has been established yet to determine the prices at which there would be maximum willingness to pay and the right cost-benefit ratio for the airlines.

challenges of airline industry

As we advance, the future seems so uncertain that many users will also be wary of undertaking these subscriptions in the fear that air travel may get suspended at any time due to any crisis.

Benefits of the Subscription Model for the Airline Industry

While there may be a few challenges, there are also certain benefits of implementing the subscription model for the aviation industry, convenience being the biggest one. As opposed to spending hours and hours on multiple websites trying to compare prices of flights to their desired destinations, with the subscription, all they have to do is make the booking. It saves time and effort on the consumer’s part and is a huge selling point.

Another benefit for the airlines is they can predict a certain amount of income that will definitely be flowing in. This helps them prepare for expansion plans and account for unwarranted expenses.

benefits of subscription model airline industry

The subscription model also locks in customers and rules out the possibility of losing them out to competitors. If they manage to impress their clientele in the process, they end up having loyal flyers for life.

Going Into 2021

As mentioned earlier, more airlines are following the lead and trying to establish a customer base in advance while ensuring fixed revenue for the forthcoming months. Also, many airlines are establishing tie-ups, allowing customers to fly with alliance airlines for a minimal cost. This global unification is very lucrative for travel enthusiasts and frequent flyers.

2021 brings with it the hope of more subscriptions across the globe and a revival of the airline industry that was so severely affected by the deadly coronavirus. A lot of people lost their jobs in 2020. Still, most of the subscribers continued to pay for their subscriptions, giving the industry hope that this model works and is here to stay. And that people are ready to instill their faiths in this model that is catching on in every industry.