Subscription airline tickets: understand how it works – 05/05/2023 – Tourism

There’s a subscription plan for everything from streaming services to toiletries. And now also for airline tickets.

In the midst of efforts to recover the volume of passengers in the pre-pandemic period, some companies have been offering plans for ticket subscriptions in countries such as the United States, New Zealand and Japan – however, there is still no prospect of the model arriving in Brazil.

In this system, which is still not widespread, passengers pay a fixed amount per month and, in exchange, can fly as they wish under certain conditions.

One of the main airlines on the American West Coast and the first to offer subscriptions, Alaska Airlines has plans starting at US$ 49 per month, or R$ 244 (to make six round trips in a year, booking with 15 days in advance) at US$749 per month, or R$3,733 (to make 24 round trips in a year, but you can book up to two hours before the flight).

About to complete a year of existence, the Alaska “flight pass” has gained a competitor: the Go Wild! Pass from Frontier Airlines, an airline based in Denver, Colorado. With it, travelers can fly as many times as they want to any of the company’s destinations in the US (booking up to 24 hours before departure) or abroad (booking ten days in advance). The annual plan costs US$ 2,000 dollars (or R$ 10,000), but those who prefer to travel only in the summer can sign the “summer pass”, valid only from May to September, for US$ 700 per year (or R$ 3,488) .

The subscription ticket model is also being tested on the other side of the globe: in August, Sounds Air, a regional airline in New Zealand, made available 1,000 “fly at will” passes, valid for three months, for the equivalent of US$ 490 (or BRL 2,442). In Japan, the low-cost Star Flyer started offering a package aimed at those who work remotely, with unlimited flights between Tokyo and its base city, Kitakyushu —with accommodation included.

Subscriptions have restrictions. On Alaska Airlines, the plans include only some of the company’s routes and, for others, it is necessary to pay an additional fee in addition to the subscription fee; at Frontier, some highly disputed dates, such as Thanksgiving, Christmas and New Year’s Day, are not included in the subscription. In all cases, passengers still need to pay boarding fees and extra services such as seats and checked baggage.

For passengers who fly frequently and have a certain amount of date flexibility, subscription plans are a good deal. To be sure, just divide the total cost of the plan by the number of flights you intend to take and compare with the average value of the fares. But for some airlines, they are an even better deal, as they help fill flights that, even with low demand, cannot simply be canceled — which can happen for different reasons.

Another reason some airlines fly for profit is slots—the right to land and take off from an airport at certain times. In the winter of 2021, for example, Lufthansa is said to have made 18,000 empty flights, simply to guarantee the slots that allow it to earn above average during the summer, when demand explodes.

Empty or slightly full flights, however, are not part of the reality of Brazilian aviation. Around here, the average occupancy of domestic flights is around 80% – a level considered healthy by the market. Even though they are flying to more destinations than before the pandemic, operating costs force companies to reduce frequencies to each destination. The Voa Brasil program, which will sell tickets for up to R$200 to retirees, pensioners and students, should eliminate the last seats that still fly empty.

With many seats occupied by increasingly high-paying passengers, there is little reason for Brazilian airlines to offer subscription plans to their passengers, according to aviation consultant David Goldberg.

“The Brazilian market has some routes with higher flows, occupations and tickets, such as Rio-SP and SP-Brasília. For a subscription model to make sense, the yield (cost per mile flown) of packages would have to be similar to those routes , which would make the product unattractive for those interested in flying frequently to other destinations”, explains the consultant. “Otherwise, companies would be reducing their profitability.”

Goldberg also sees other difficulties for the wide dissemination of subscriptions in the airline industry, such as the potential size of the market for this purchase modality and the behavior of travelers who could pay for the service in Brazil.

“An important part of the tickets are acquired by the corporate market, and another by customers who do not travel on a recurring basis, which greatly restricts the fraction of passengers eligible for the offer”, he says. “Furthermore, customers who have the resources to pay for a large flow of trips favor the convenience of selecting the most convenient times and airlines, making the loyalty implicit in this type of product difficult.”