How airlines become banks
How is it that the airlines can give away the farm as far as low ticket prices or vouchers and still stay alive? If you ever wondered how airlines can make money when they seem so dysfunctional, then you will enjoy this well thought out video. Below are several questions that I invite you to respond to if you like. Questions give us the ability to apply what we learn and add some value to our career choices.
Are airlines are loss leaders?
Maybe the smoke and mirrors of an airlines operations are really masquerading as a different revenue stream.
Have you noticed that airlines are not really profitable machines in themselves anymore?
Marketing is the name of the game. A force that lives strong in ecommerce sites and brick and mortar retail sales as moved full force into airline customers and the value of their data.
When did this really start?
It started in 1978 and grew legs. 1978 was the year of deregulation. That event is becoming more and more significant as airlines are truly defining themselves and evolving into the most efficient sales machines that they can be. Even the worse airlines with the worst reputations have an alternate revenue plan in progress and that all started when the government finally let go of regulating the industry.
Does Loyalty have a number?
Without a doubt, and so should you as a pilot. If the company seems to be not that interested in you as a product, what is their main focus? It makes you think long and hard about career choices and what you do. Are you adding true value to aviation or a system?
Is the industry just about creating and enhancing the loyalty plan concept verses the mission statement that they tell the general public?
Most likely the general public does not have a clue about the ways airlines make money besides ticket prices.
Does this remove the purity of what flying is all about?
Maybe if you knew about the "game" before getting into this career it might make it a bit more palatable. One viewer said it best. "Airlines are credit card companies that fly airplanes as a side hustle"
I did find the ad at the end a bit puzzling. It shifts into an advertisement about Audible and how great it is. Actually the service is not bad, but I found it interesting that the ad took place at the end of the video because mostly the video was about airlines are really focused on their loyalty programs. So is this video trying to do the same thing?