Ivan’s Hypothetical Airline: 7 Suggestions To Improve the Industry

Isn’t the airline industry the one you love to hate? Every time you pick up the phone, you never know what price you will be quoted and how many times you will need to call till you get a “fair” fare. Could be a game that goes on for months; maybe unsold inventory will be dumped, maybe not. Then you sit on a plane with people who each paid 20 different prices for the same seat. If you are a last minute traveler and pay the most, you probably have little choice of where you sit and go hungry if you are vegetarian or kosher as no alternative food is on board. To a sane world, this is an outrage. 

During a 3 hour flight to Puerto Rico last week, I created Ivan’s Hypothetical Airline in which all these problems could be solved and I dare the Bob Crandalls of the world to tell us why such an airline couldn’t be as profitable as the current monstrosity that costs billions to administrate. Here’s 7 suggestions: 

1. Bring greater predictability and fairness to airline pricing. Create and publish a fare structure according to mileage, divided into peak and offpeak flights with a sliding scale rewarding advance purchase (see attached chart). One-way fares are 50% of round trip fares. Add a 50% premium for first class. A surcharge for changing planes ($20) and a higher fare for short hauls reflects the startup costs of handling a passenger who makes a reservation and uses the facilities of an airport and airplane. The current situation where it is cheaper to fly from Dallas to Des Moines rather than just get off the plane in Chicago (where one might have changed planes) is ridiculous. 

2. A seat unsold is lost revenue. Standbys who either don’t care less if they get on or who are willing to take the risk should be accommodated rather than extorted or allowed to walk. Cancellation and standby policies enables airline to sell last minute standby tickets without having to worry about those who would buy the highest price tickets from hedging their bets by cancelling their tickets if their standby clears. People will probably exchange tickets less often if they get the flights they actually want at a decent fare the first time around. 

Sample Policy: All tickets nonrefundable with $50 change fee per segment. $100 penalty if reservation not cancelled 24 hours prior to departure; ticket fully nonrefundable if not cancelled 4 hours prior to departure. Standby begins 4 hours in advance only. 

3. Frequent flyer programs should reward only truly frequent flyers and give them what they really want; even lower fares. Examples: 

For Those Who Fly the Same Route at least once a week:

20 segments must be flown in 90 days in same fare category; buy coupon book in advance and get 15% discount 0-3 day coach or business class fare. If you buy at the offpeak rate and fly peak, pay the difference of the 0-3 day fare at the counter. Here the airline gets cash up front and gives a use-it or lose-it. 

For Those Who Fly A Lot Systemwide:

20 segments must be flown in 90 days systemwide at the 0-3 day coach or business fare; 10% retroactive credit against the total amount spent toward future flights. 40 segments gets a 20% credit. 

4. Make airplane food more predictable and reduce a major expense by letting people buy it in advance; let them eat it when they want it and make more vegetarian (that can double as kosher) items available. Eliminate the whole concept of special ordered meals which doesn’t work for people on last minute schedules. Sell these ready-to-eat meals in the departure lounges. Offer two choices; economy of scale will permit low prices for all. End captivity and starvation for those on 7pm dinner flights that sit on runways and eat at 9. 

Example: Lunch $7 

A. pasta salad, mixed greens salad, cheese and crackers, brownie 
B. vege burrito, fruit salad, bread and cheese, cookie 
5. Tighten up on practices that create administrative expense and consumers ultimately pay for: Advance seat selection doesn’t hold up and makes flights depart late. First come first served is more efficient and encourages earlier arrivals at the airport. Eliminate all discounts (ie: senior citizens, military, children) and courtesy holds; all seats must be paid for at the time the reservation is made. No commissions to travel agents; let them surcharge their clients if the passenger won’t book directly with the airline. Use the E-ticket systemwide and eliminate paper tickets. 

6. Allowing deplaning from the front and rear will get people off planes faster, make people happier and allow faster turn-a-round. 

7. If the airline wants premium last minute revenue, it can set aside seats for sale at that price during the appropriate time period. This will also assure last minute travelers that they need not always be concerned that leisure travelers will fill up all flights. First class can keep their hot meals onboard and reserved seats. 

In short, exchange and modify certain perks for more predictability and fairness for travelers. 

Ivan’s Hypothetical Airline

Schedule of Fares — All Prices Round Trip 
One Way is 50% and then round up to nearest 5