Hail the air taxi: Airline wants to charge passengers by the minute
Filed under: Travel
It had to happen. One new airline in South Africa has decided that the way to instill a sense of value in the minds of potential consumers is to rip a page from the taxi playbook: Charge by the minute of travel.
It's smart, at least on paper. Passengers buy a "starter pack" of minutes, which include all surcharges and taxes, and use them the way you might use a pay-as-you-go cell phone plan. All routes are worth a set number of minutes, and minutes would cost 5 rands each (or about 50¢, thanks to South Africa's weak currency). One of the proposed routes will be between Cape Town and Durban, and that is charged at 125 minutes. (If the plane is late or has to circle the airport for an hour, presumably the price wouldn't change. The flight would always be worth the same number of minutes.)
The carrier, called Airtime Airlines, was supposed to start selling tickets this week and begin flights on January 18. But paperwork has stalled, and right now, things are in doubt, even though its website is still up.
But I wouldn't be surprised to see the idea resurface someday. Set-price flights are a novelty in an industry built on unpredictable price fluctuations. They have the potential to give customers a strong sense of value. You know what you're going to pay for any route, and that it's not going to go up, if only you can nab a seat. Changing airfares and last-minute gouging have been one of the main things that have driven American consumers to distraction over their travel costs. Unfortunately, they are also now a way of life for our airlines, and a principal way that traditional carriers have met their costs. This system would eliminate that road.
That's great for consumers, until the day Airtime flies too many empty planes and can no longer afford to keep going. Which would happen if its giant competitors decided to slash fares on the same routes in order to drive it out of business. This high-risk structure would mean that the airline would have to make sure its flights were always as full as possible, with little margin for error if prices are going to be kept low enough to be appealing. Its owners might eke out a steady profit in that case, but likely nothing to thrill investors, and they aren't going to make a killing in the current market.
Then again, if rates are truly sensational and the masses embrace the concept, pay-as-you-go travel could be contagious. Cabs are already charging in increments of distance, so the idea isn't completely foreign to us.
It's smart, at least on paper. Passengers buy a "starter pack" of minutes, which include all surcharges and taxes, and use them the way you might use a pay-as-you-go cell phone plan. All routes are worth a set number of minutes, and minutes would cost 5 rands each (or about 50¢, thanks to South Africa's weak currency). One of the proposed routes will be between Cape Town and Durban, and that is charged at 125 minutes. (If the plane is late or has to circle the airport for an hour, presumably the price wouldn't change. The flight would always be worth the same number of minutes.)
But I wouldn't be surprised to see the idea resurface someday. Set-price flights are a novelty in an industry built on unpredictable price fluctuations. They have the potential to give customers a strong sense of value. You know what you're going to pay for any route, and that it's not going to go up, if only you can nab a seat. Changing airfares and last-minute gouging have been one of the main things that have driven American consumers to distraction over their travel costs. Unfortunately, they are also now a way of life for our airlines, and a principal way that traditional carriers have met their costs. This system would eliminate that road.
That's great for consumers, until the day Airtime flies too many empty planes and can no longer afford to keep going. Which would happen if its giant competitors decided to slash fares on the same routes in order to drive it out of business. This high-risk structure would mean that the airline would have to make sure its flights were always as full as possible, with little margin for error if prices are going to be kept low enough to be appealing. Its owners might eke out a steady profit in that case, but likely nothing to thrill investors, and they aren't going to make a killing in the current market.
Then again, if rates are truly sensational and the masses embrace the concept, pay-as-you-go travel could be contagious. Cabs are already charging in increments of distance, so the idea isn't completely foreign to us.
Reader Comments (Page 1 of 2)
1-09-2009 @ 8:16PM
niap223 said...
The US airlines should charge by the minute too. They are using the cheap mechanics over there too. Everyone only has minutes to live after takeoff so why charge for the whole trip.
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1-09-2009 @ 8:57PM
wcsiii said...
one american airline already does this and they have been for over 20 years. Its called the AAirpass. you pre-buy miles not minutes at a set rate about 25000 miles for 2 years(minimum) or 50000 miles total. last quote I saw was about 30 cents a mile. So because of the Rand the 50 cents minute is a deal, as average flight is about 5 miles a minute (300 mph).
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1-09-2009 @ 9:09PM
ceata31 said...
Can we get negative mnutes for airline delays??
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1-10-2009 @ 8:08AM
Billybrw said...
So long as we get .50 a minute back for time sitting on tarmac or delays
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1-10-2009 @ 8:57AM
Matt said...
Yeah...I'm gonna start an airline too. Only 25 cents a minute!!! I have 1000 minute "starter packs" available. Just send me the money and I'll work out the rest of the details later...
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1-10-2009 @ 10:37AM
james said...
Correct me if I'm wrong but this sounds like something we already use it's call airfare. It cost a set amount to go from point A to point B
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1-10-2009 @ 9:59AM
Ted said...
The airlines in the US seem to set their rates on an arbitrary marketing scheme instead of cost of operation. It costs less to fly from Dallas to Orlando than from Dallas to Denver. Where is the reality in that?...
Sure, the high fuel costs of the last year were a tremendous burden to the airlines, but trying to offset it with baggage, beverage, snack, and seat-selection fees is insane. As much as I dislike governmental regulation, here is one place I would support it. All flight prices should be based on operating costs....
A base fee for company overhead operating costs should be established for each airline. The "front-office" costs are the same for every flight. (That should trim some executive salaries!) After that, the ticket price should be based on the type of plane, the miles of the trip, and the weight of the "cargo". Those are the real costs of a flight. A 300-pound passenger with no luggage should pay more than a 90-pound passenger with a 30-pound suitcase. Weigh all passengers and their luggage, and then set the price accordingly. If someone gets offended, they should lose weight, or walk the distance!..
Put some rationale and reality into the ticket costs and get rid of the superfluous BS.
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1-10-2009 @ 10:02AM
cherie said...
niap223 you don't even know the half of it.. two of my daughters got on three planes in one day...the first (that they were on together) lost cabin pressure, the second had the emergency chute loose from the fusalage so they had to wait for it to be fixed, the third plane which was going to Germany had "mechanical difficulties" and then a flat tire after that. Each plane was delayed for hours (except the first one)... then on one of my daughter's return flights from Germany , that plane had a cracked windshield so they had to go on another plane... I made a complaint to the aviation safety hotline at 1-800-255-1111 or u can call air travel consumer complaints 1-202-366-2220 . They only call if there is a valid complaint. Well guess what a US Airways lady called back and said she is going to call my daughters (which she hasn't yet) ... so yeah call and complain people and lets get this airline accountable before people get really hurt...
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1-10-2009 @ 10:17AM
Robert Long said...
they can charge any way they like , I'll walk thank you !
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1-10-2009 @ 10:50AM
GORDON said...
YA
WHY NOT THE PILOTS ARE ALREADY GETTING
PAID BY THE MINUTE--
SITTING ON THE TARMAC OF IN THE AIR AT 31,000 FT
A 747 CAPT MAKES $3 OR $4 A MINUTE!!!!!!!!!!!!!!!!!
IT'S CALLED A "BIG-MAC-A-MINUTE"PAY RATE
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1-10-2009 @ 11:00AM
TNG said...
I have never been in a cab that had a set # of min. or mi. per trip there is a major difference between the two (planes and cabs) plans.charge by the min.go much slower and ones that charge by the mi. take the long way,no comparison.Have taken the same in same day same rout and had 2 different charges.Oh yes would the mi. expire like that of cell phones,think about that a while.
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1-10-2009 @ 11:17AM
Moongrim said...
Oooooh, talk about an incentive for airlines to delay EVERY flight they can!
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1-10-2009 @ 11:54AM
basketpam said...
Yea right! These are probably the same airlines that leave passengers sitting for hours on end on the tarmac. I can see these airlines that are already trying to milk the public doing everything they can to gouge their customers even more. The worst thing the United States ever did was to deregulate the airlines. It ranks right up there with the deregulation of the phone companies and now the energy utilities. Congress will NEVER learn from their past mistakes. If anything the airlines need MORE regulation and a set of rules set up by the federal agencies to stop the abuse they heap on the flyers in today's economy.
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1-10-2009 @ 12:06PM
Mike said...
Airlines should charge people by the pound. Person and luggage.
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1-12-2009 @ 3:53AM
neil said...
haha, that's pretty mean but I do kinda agree with you!! why should I have to subsidise some big fat dude with tons of luggage?
1-10-2009 @ 12:05PM
R.J. said...
Comical...Its as if the profit margin isn't enough, let's gouge the passengers even more. At what point do executives realize they are providing a service to the customer, and, if the customer decides to walk, drive, or swim to their destination, THE AIRLINES BUSINESS WILL GO UNDER. Look, this is all apart of globalization, and, until executive realize business, as much as people like to think, DOESN'T DRIVE THE ECONOMY, PEOPLE DRIVE THE ECONOMY, PEOPLE WHO CAN AFFORD YOUR SERVICE. Until that is realized by every executive who is in charge, in every nation, globalization will never prosper. This means, when you try to connect the market on a global level, you must be ready to connect WAGES ON A GLOBAL LEVEL. First, we try air miles by the minute in South Africa, and then we try it all over the world. Greed, its all pure greed, the sad part the greed comes from the people on top who are suppose to be the GUARDIANS OF THE COOKIE JAR, SADLY, THEY ARE THE ONE'S WITH THE HANDS IN THE COOKIE JAR. The nation deserves better leaders. If you are an exec, and you make what is equivalent to 1 million american dollars and you need a raise, and you get that raise off the backs of your workers, are you really a leader? It tkaes a special kind of service before self attitude to be a leader, not some COLLEGE DEGREE THAT MAKES YOU LOOK AS IF YOU ARE SMARTER THE THE PEOPLE WHO PERFORM FOR YOU...GEEZ, WHEN WILL WE LEARN. We the people, drive the economy, the global economy...
PS, Bachelors of Science in Professional Aeronautics major...
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1-10-2009 @ 2:00PM
nic said...
great- as long as it goes both ways
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1-10-2009 @ 1:11PM
j morgan said...
Then there will be a price break for the time waiting on the plane to leave (on time) and spent on other delays, their fault, with check in time also deducted, right?
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1-10-2009 @ 8:16PM
JS said...
I'm not surprised. We are buying everything a la carte now. Baggage, food, now flying minutes?
http://www.airlinalacarte.com keeps track of these changes.
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1-10-2009 @ 8:27PM
sissy said...
i totally agree charge on Airlines should charge people by the pound. Person and luggage.
Reply