The future of Airline business models
Two weeks ago I had a brief discussion with the CEO of Corendon Airlines, Atilay Uslu, about his business. He told me that the airline sector is going to test out some new business models in the future. One of the ideas was to give away flights for free and earn on sponsorships, advertisements and sales during the flight. This is a pretty interesting model and I’d love to test it out once. How would a flight like that look like? (I’ve put a € sign on every revenue stream).
Your seat would be sponsored by a Telco of the country you’re flying to (€ fee per passenger)
The entertainment system would only show programs like: home shopping (or better flight shopping) (€ cost per item sold and cost per view), the best commercials (€ cost per view), infomercials full of advertisement about the city of your destination (€ cost per view).
Of course there is the opportunity to gamble (€), just sweep your credit card and start earning back your vacation!
Maybe you can win a Nokia cell-phone (supplied by Nokia, with widsets preinstalled -barter deal-) via a game of Bingo (€ per ticket).
Sweepstakes, win a holiday for the whole family, sponsored by travel agent x (barter deal with travel agent) (€ per lot)
Everything can be purchased via your credit card, with cash or by reversed billed SMS messages (for micro payments).
Do you want an internet connection? and power for your laptop? no problem, your credit card please (€ per flight).
Then of course there is the food and beverages department. Corendon signs of a deal with the Coca Cola Company and Unilever to sell only their products (€ flat fee per year), to make sure that you’ll buy enough food and beverages they have the Climate Control!! Chances are that these flights will be hot, the air will be dry and it will smell like your favorite bakery (€).
These are just some things I’ve made up during my 1.5 hours flight from Stockholm to Amsterdam (the climate control forced me to buy a water, crisps and a tonic). I think it is quite an interesting case and would love to take part during the brainstorm sessions of Corendon, Easyjet, KLM, etc (I know a way to do that for virtually free as well 
)
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Hi Patrick,
interesting post.
The aviation industry is an industry that I am very passionate of.
The concepts that Mr. Uslu, exposed to you are already there. Think about the number one Low cost airline in EU, Ryanair.
Ryanair, offers flights for free and they are still the most profitable Airliner in EU and one of the most profitable airlines worldwide. How do they do that? Of course not from the tickets sales.
Ryainair actually is considered an airplane leasing company that offers flights from point A to point B. In addition, Ryanair makes profit from the airport taxes charges, advertising on their airplanes, and of course by having the small regional airports paying them in order to bring passengers and boost the tourism in that specific region.
With regards the aviation industry, already from 2001 the business model have changed. In the coming future there will be more and more low priced tickets for the mass and there will also be a boost of business and first class travellers that will travel with exclusive airlines, such as Silverjet etc.
Here in EU, some low cost airlines already struggle with the high competitive market. For example Vueling (a very reliable and good service airline) is expected to close down several slots/routes. In addition, companies such as Corendon, they mainly work with Travel agencies that provide complete tourist packages.
In any case, for the reason I am involved in the aviation industry (as a hobby and not professionally) I would not mind sharing with you my experiences and knowledge.
Have a nice day.
Thomas
Hi Thomas, great comment. I’m really wondering where the whole market will go to. It is very interesting. If I ever have to work with an Airline, I’ll ping you and include you.