The ultimate business travel solution

The problem

With globalization ever-increasing, the amount people who have to travel by airplane for their work also increases (IMR, 2014). Among these business travellers are auditors, consultants (as many of you future consultants will experience later in your careers, consultants generally travel a lot) and general outsourced project specialists. There are still two major issues companies are concerned about regarding air travel by their employees (Surf Air, 2013). The first is that frequent, long and uncomfortable air travel can disrupt an employee’s life and lowers work productivity. The second is about the costs involved. Currently, frequent air travel can become quite expensive (regarding tickets) and takes up a lot of time besides the actual flight duration.

The solution

Surf Air

In early 2013, current CEO Jeff Potter started a subscription-based airline called Surf Air. Starting on one of the busiest business routes in the world (LA-San Francisco) (International Air Transport Association, 2014), Surf Air basically offers unlimited travel at a fixed price per month (starts at $1.750). Once subscribed, customers download an app through which they can check available flights (via Surf Air’s own fleet of private jets) and book a seat instantly. They arrive at the airport just fifteen minutes before take-off (via special business terminals, avoiding long ques), fly to their destination, land and hop in a taxi.

Due to the many shortcuts in the process, travellers are able to save a lot of time which adds to their comfort and saves their company valuable dollars as their employees can spend more time doing actual work. Furthermore, companies can actually save on frequent flyers (5+ times a month) as Surf Air membership is generally cheaper than buying individual tickets.

Making work easier

The strength of Surf Air is that customers allow Surf Air to make the difficult decisions for them. For a fixed fee per month, they provide a(n) (often) cheaper, faster and more comfortable solution than someone could ever provide on his/her own. Surf Air’s current service range includes air travel only, but the possibilities are numerous.

Instant Air

A young company similar to Surf Air is Instant Air. Instant Air is a Dutch company operating in Europe (main route is Frankfurt-Amsterdam) (Instant Air, 2015). Besides offering unlimited travel against a fixed fee per month, Instant Air wants to go a few steps further and offer whole business trips on subscription including taxi’s to and from the airport, hotel rooms and/or dinner reservations. This way, Instant Air is able to facilitate every aspect of business travel outside a company’s core business.

Companies like Surf Air and Instant Air have a major advantage over traditional airlines due to the benefits a subscription-based company has. When the airplanes of Surf Air or Instant Air are not fully booked, they still earn revenue through the subscriptions. When traditional airlines’ flights are only half full, they miss (approximately) half the revenue. Furthermore, Surf Air and Instant Air profit from cream-skimming as they attract only highly profitable business clients whereas traditional airlines (need to) serve the whole market.

Prediction

Personally, I believe companies like Surf Air and Instant Air are one of the lately many subscription-based business model success stories. Regarding the future, I feel major airlines have to adapt or lose their profitable customers to these new players and be left with the not-so-frequent flyers. On the other hand, large airlines, being incumbents, probably possess significant market knowledge to be able to threaten these new entrants. However, whether they will realise the threat in time is another issue…

By Niek Huisman
441788

Sources

IMR (2014). GBTA. http://www.internationalmeetingsreview.com/research-education/gbta-2014-us-business-travel-spending-poised-top-292-billion-99371

International Air Transport Association (2014). World Air Transport Statistics. http://www.iata.org/publications/pages/wats.aspx

Instant Air (2015). FAQ. http://flyinstantair.com/faq.html

Surf Air (2013). About. http://www.surfair.com/

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One response to “”

  1. 356767nj says :

    Interesting blog post! I think this will be a solution for many business man in the future, not only to make their travelling easier, but cheaper as well. I find it interesting that in some cities the rent is so high that it is cheaper for the business people to commute to work using airplane. An article on Independent UK states that Living in Spain and commuting to London ‘cheaper than actually working in London’.The research, from Labour Mayoral candidate Tessa Jowell shows that in total, the move to Spain from London and commute everyday could save £4,836 a year.
    (http://www.independent.co.uk/news/uk/home-news/living-in-spain-and-commuting-to-london-cheaper-than-actually-working-in-london-10424156.html)

    For the companies themselves this solution might become valuable and money saving option as well because the employees can travel faster and faster return to the office.

    One more thing came to my mind when I read the post that Airbnb just recently introduced a new department which will try to tackle the business travellers. Airbnb wants to offer companies a possibility for more comfortable business travels. They want to create a platform where the employee will see details about his upcoming business trips and the managing and booking would be reported by Airbnb to the company so all of the business trips would fall under one roof and central billing and financial reporting would be efficient and clear.
    (https://www.airbnb.com/press/news/airbnb-launches-global-product-suite-for-businesses)

    After reading your blog post I think it will be interesting to see what happens in the future and if those technologies will disrupt the business travel market. I think a very efficient and interesting way to disrupt would be combining those two companies and technologies together.

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