This is not a new pricing concept, as round-the-world tickets have been around for a while.
With tickets from San Francisco to New York costing close to $300 round trip, at first glance $599 seems like a good deal. Of course, in this economy, consumers are not doing much leisure traveling, especially since hotels and local transportation costs can add up quickly. Travelers who would benefit the most from this deal are the ones with out-of-town relatives or friends with whom they can stay while visiting.
Is it really a good deal? An average round-trip ticket probably costs around $200. One would have to make at least three trips to make the pass worth it. Even a travel lover like me would think twice before planning more than three trips in a four-week period.
So...what is the value proposition? Perhaps it is the spontaneity the pass would provide. As long as seats are available, a pass holder can book a flight only three days in advance. But then again, how valuable is spontaneity when the pass is valid for a restrictive one-month period? And what is the likelihood that seats would be available when I want to fly?
At this price point, I don't think the All-You-Can-Jet pass adds much value to consumers, but that is not the end of the story. Let's not forget about the buzz and the resulting brand image boost, since the pass does seem like a good deal at first glance.
Can a company win something for offering next-to-zero-value to its customers?
Of course. This All-You-Can-Jet pass is but one example of commercial innovation.
Demand also falls in the Fall along with price, so the SF to NY R/T flight you mentioned is worth significantly less than the $300 summer peak. I agree with you; the pass is not worth the price unless you are traveling more than 3 long distance flights for the month. I'm not sure JetBlue expects leisure travelers to think otherwise; if you look closely at their marketing the words don't shy from corporate travel: "or meet with a client" It'd be interesting to see the breakdown between corporate/pleasure purchases.
ReplyDeleteYou have a good point. I did notice the copy mentioning corporate travels.
ReplyDeleteI traveled for work as a consultant. We seldom made purchases based on deals. Consultants care most about frequent flyer miles, when someone else is paying.
This pass would entice small-business owners who personally pay for their flights. That market is quite small.
Just like churascarias or all-you-can-eat buffets, other deals that seem better than they really are.
ReplyDelete