Subscribe to fly? Airlines have been slow to take that leap

You eat HelloFresh for dinner. Spotify helps you get your groove on. You watch Netflix with the family, shop anytime you want with Amazon Prime, and Chewy means the pets never go hungry.

So when, you might wonder, will air travel be as simple as the subscription services that ease so many other aspects of our lives?

It’s been a year since Alaska Airlines became the first major U.S.-based carrier to launch a flight subscription program . Frontier Airlines is rolling out its own in May.

Kazakhstan-based FlyArystan announced this week a partnership with Caravelo , a travel-tech company that provides the subscription platform for Mexico-based Volaris and South Africa’s Flysafair, as well as Alaska Airlines. Caravelo announced a similar partnership last month with Hungarian-based Wizz Air.

While it’s not exactly Disney+ battling for screen time with HBO Max, the growth of video streaming services provides a flight map of sorts for the airline industry, says Iñaki Uriz Millan, co-founder and CEO of Barcelona-based Caravelo.

“I believe this is a global trend,” he says. “This subscription model has come to so many other verticals before. Now it’s coming for airlines. And I see that more and more airlines will jump into this.”

Yet travel subscriptions are still in their infancy in the United States. Phocuswright's latest annual consumer survey of U.S. travelers found that about a quarter of travelers were interested in subscribing to a travel company or service in return for exclusive perks and benefits.

Travelers ages 18-34 showed the most interest at 41%, while just 3% of those 55 and older were keen to the idea. Interest was also higher among those who take at least six annual trips – 36% – versus 22% for those who travel less frequently.

Blaise Waguespack, a professor who studies airline marketing at Embry-Riddle Aeronautical University in Daytona Beach, Florida, doesn't see flight subscriptions proliferating anytime soon the way video services did.

“It’s not going to be a mass streaming type subscription service. That probably wouldn’t work financially,” he says, adding that new programs are likely to be more narrowly focused on certain routes and types of travelers. “I think it’s going to [continue to] be unique programs.”

Alaska Airlines, for instance, tailored its service to boost efforts at building market share in California, far from its metropolitan Seattle base.

Flight Pass allows passengers to book six, 12 or 24 roundtrip flights at a fixed-monthly rate. It’s offered in 13 cities in California and from select California cities to Phoenix, Las Vegas, and Reno, Nevada. In November, the airline added flights from select California cities to Salt Lake City.

“Utah is a popular ski and outdoor recreation destination among our California subscribers, and we’re happy to now make those trips more affordable and accessible with Flight Pass,” Neil Thwaites, Alaska Airlines regional vice president of California, said at the time.

The airline says Flight Pass grows steadily among frequent travelers on the West Coast, particularly among millennials and Gen Z from Northern California. The most booked Flight Pass routes connect between the major metro areas in California, while the most popular plan is a $49 per month service that includes six roundtrip flights a year.

Millan believes Alaska Airlines will reap the rewards of brand loyalty generated by young subscribers in years to come.

“If you subscribed to a product, then you’re no longer searching for flights when you’re trying to book,” he says. “You pay a fixed fee every month to get your flight, which means you’re never going to be comparing flights with the competition. If they can get people on that subscription, they’re going to gain market share in California.”

Yet subscriptions can pose risks as well, according to former Spirit Airlines CEO Ben Baldanza, who writes about airlines for Forbes. In a column following the Alaska Airlines rollout last year, he warned about “people who become resentful of the monthly charges because their initial flying aspirations didn't end up matching with life realities.”

Frontier, for instance, is offering two “all-you-can-fly” subscription passes beginning May 2: an annual pass for $1,299 and a summer pass (good through September 30) for $399.

But the fine print can be daunting.

Pass tickets can only be booked one day before the flight for domestic travel and 10 days before for international flights. Not all flights will be available for booking with a subscription, and taxes, fees and charges still apply.

“For people with flexible schedules, this is a terrific opportunity to have a truly epic summer and then some, soaking up rays on the beach, exploring national parks and visiting new cities,” says Daniel Shurz, a senior vice president at Denver-based Frontier.

Another advantage for airlines in offering a subscription service is the consistent revenue streams they can produce. After Volaris launched V.Pass in conjunction with Caravelo in 2018, the program exceeded 30,000 subscribers within four years, Millan says. Those regular customers were like “a lifesaver” during the pandemic, he adds.

“This industry is famous for doing well, then doing poorly,” says Waguespack, the airlines marketing expert. “That subscription service can [provide] a nice little stream of revenue. Those that buy that subscription, odds are you stand a pretty good chance that they’re also frequent flyers, and they might even have your credit card and build loyalty.”

In that way, subscription services could one day be the ultimate loyalty program.

“Exactly. That’s going to be an aid for you,” Waguespack says. “They’ve already made a pre-investment in your airline [by buying the subscription] so more than likely they’re going to make sure they get the value in that and use that before they go price-shopping [with another airline].”

While it’s been mostly low-cost carriers that have tried a subscription model, Millan says that doesn’t mean major airlines won’t eventually get on board.

“The big players are not typically the first to join a new way to think,” he says. “They were not the first to charge for luggage or seat selection. Others pioneer, and then [the bigger airlines] buy into the model.”

Millan has built his business on the belief that more airlines will buy into the idea, especially as subscription services become more commonplace in everyday life.

“[Airlines] are seeing that if this was successful in so many other verticals and this created healthier revenue streams, incremental revenue, hyper-loyalty and so many other benefits, they wonder, maybe there’s a way to do business more successfully in the airline sector,” he says.