I tried as hard as I could to get my A380 post up today, but I just ran out of time. I have over 100 pictures, a dozen videos, and a lot of thoughts to process, so it’s going to have to wait one more day. Instead, take a look at some of my continuing coverage from last week at NBTA.
At NBTA last week, the airline CEO roundtable had both Montie Brewer from Air Canada and Richard Anderson from Delta get up on-stage and talk to the crowd. At the very end, there was a heated exchange between Richard and the audience that I thought would be an interesting story to tell here.
After a handful of questions, we were finally down to the last one before the session was over. A corporate travel manager (the most important attendees at the show) stood at the microphone and asked why it was that when she booked all this travel for her employees and they had to change who was going on the trip, she had to pay such a high fee. She finished with “I bought that ticket, it’s my ticket, so why can’t I [change the name on] it?” That question brought on a chorus of cheers and applause from the audience.
Delta CEO Richard Anderson shot back by asking, “Why wouldn’t you just buy 2,000 tickets under John Doe and change the name later?” Then the crowd really lost it. They started yelling, “Yeah, why not? Great idea!” and all that kind of stuff. Richard yelled, “NO!” into the mike and that pretty much set people off.
He looked at Montie Brewer and had him chime in at which point he said, “Actually, on Air Canada you can.” Clearly he was pointing to the pass product that Air Canada has successfully offered, but that didn’t help Richard’s cause. Ultimately, Richard said something about segmentation in the market which just confused most of the attendees and that was that.
Not exactly the best discussion there, but let’s talk about why airlines don’t offer name changes. It IS about segmentation in the market. See, if you book early, you can get a better deal. But if you have the ability to change the name on the ticket, then you end up with ticket brokers like you have at concerts. Someone will buy all the tickets and then sell them at a profit to last minute travelers. That price will still be less than what Delta will charge you, so you’ll still buy from the ticket broker.
So why don’t we just do it that way, you ask? Well, the ticket prices would have to rise dramatically. This would mean that very few people would buy from the airline at the last minute, so the early booking prices would have to rise to compensate for that loss.
Now in my opinion, I don’t see this as being a terrible idea if it can be structured right. I would love to resell my ticket, so why can’t the airlines just work with someone like StubHub and create a market for reselling (name changing) where they can actually take a piece of the action? The numbers would clearly need to be worked out, but I tend to think it could be a very interesting differentiator, especially in the corporate world.
The key for the airline is controlling the market and taking a transaction fee each time it happens. One of these days, I’ll get around to crunching those numbers to see how it could work.
What do you all think?