People purchase newspaper subscriptions, cell phone service, and gym memberships on the monthly basis-why not flights?
A startup called OneGo is able to apply that model towards the skies, looking to attract business travelers with a few way of measuring financial predictability – and savings – within the often chaotic world of airfare prices.
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The company’s other pitch is simplified booking: Whenever a potential client suggests a lunch meeting tomorrow in Chicago, for example, those last second fares won’t hurt. OneGo launched its mobile app on Monday, and intends to make it offered at Apple’s app store March 1. An Android operating system version is also planned.
“Through the elimination of those factors such as price and payment, you really allow people to concentrate on where they should be,” says founder Paulius Grigas. “You allow them to concentrate on their needs.”
Using seven of the largest U.S. airlines, OneGo partitions the country into four regions. The service charges US$,1950 monthly for flights in any of three zones, while per month on the West Coast costs US$1,500. A nationwide plan involves Us$2,950 monthly.
For e-commerce model to operate, OneGo needs to ensure that its pricing can encompass a variety of last-minute fares and additional fees involving a preliminary 76 airports, which includes all the big U.S. cities. The organization also covers several smaller destinations, for example Aspen, Colo., Lubbock, Tex., Pensacola, Fla., and Savannah, Ga.
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Prepaying for flights and locking in fixed costs is almost not a break through within the airline industry. American Airlines, United, Air Canada, yet others offer such products. American’s AirPass program begins at US$10,000 and offers discounted rates on last-minute, full-price tickets, which may be attractive to business travelers who might not know what trips their future will hold.
Under OneGo’s basic plan, you’re permitted to hold four reservations at any one time, and trips should be booked seven days ahead of time. Things such as baggage fees and cabin upgrades aren’t covered. For an additional US$750 monthly, you are able to hold up to as many as eight reservations.
Certain options are more expensive. Around the national plan, for instance, adding the ability to book last-minute flights costs US$1,950 more monthly, and unlimited flight changes cost US$950.
OneGo is betting it can attract enough users to ensure that airlines will offer you it the amount discounts they give major corporations that steer employees to specific carriers. The company is small, therefore it must build a history before it may seek out such discussions, says Grigas, who adds that he invested US1 million of his own profit OneGo.
A former corporate turnaround specialist in Lithuania, Grigas concedes his company will forfeit cash on occasion, because of the travel patterns of the very most hardcore road warriors. But longer term, OneGo is betting not everybody who spends US$1,950 monthly for a subscription will fly the same as Us$1,950 monthly. (That’s the actuarial model that keeps insurance providers, as well as your local gym, afloat.) And just like your gym, OneGo’s service renews automatically until you cancel.
Carriers used all-you-can-fly promotions to fill seats that may otherwise stay unsold during off-peak travel periods – and also to generate buzz among leisure travelers. JetBlue Airways Corp. has sold a flying pass on two occasions. Its initial program offered unlimited autumn travel for 31 days at the price of US$599 in 2009. The second version, annually later, was more restrictive; prices ranged from US$499 to US$699, based on travel days. That program yet others like it were aimed primarily at leisure travelers.
In the first 1980s, when it was looking for cash, American sold a US$250,000 pass that offered unlimited top class travel for a lifetime. That was a fiasco for that airline.
OneGo says it can save business travelers time because it will focus only around the best flight schedules and avoid wading through nonstop and connecting options, all with different prices. Grigas said his team has tested the model for 15 months, stressing it having a variety of airfares and road warrior booking approaches. “Every day we’ve more confidence,” he says.
Still, prepaid flying may remain a distinct segment product because nobody really trusts the complex (and often infuriating) software that sets airfares: a US$200 fare right now might fall to US$175 in Twenty minutes. So, like playing the lottery, a belief fortunate from the draw may dissuade some travelers from giving airlines money before they really have to fly.
Bloomberg News
