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Can Flight Subscriptions Help Airlines Recover From an Unprecedented Drop in Demand?

Brian Sumers

Photo Credit: Volaris, a Mexican airline, sells a subscription that allows customers to fly once per month.  Volaris

Skift Take

Before Covid-19, many airlines were skeptical about subscription services. They feared selling cheap seats and not having enough inventory available for big-spenders. But times may be changing.

For several years, Iñaki Uriz has aggressively pushed airlines to adopt flight subscriptions, promising smooth and predictable revenue, but they were rarely interested, fearing lost sales. With near-insatiable demand for air travel, they prioritized yield on ticket prices over volume. That began to change in March as coronavirus gripped the industry. Airlines were hemorrhaging customers, and some said net revenue dropped below zero, with cancelations outpacing bookings. In many regions, business has improved, but high-yield corporate travelers have not come back en masse, and no one is sure when they will. Many airlines are bracing for a slow recovery, and they'll take revenue anywhere they can find it. "Their revenue is not predictable, and not stable, and this has consequences," said Uriz, CEO of Caravelo, a Barcelona-based company that builds subscription platforms for airlines. "They understand they should have a mix of transactional revenue and subscription revenue."

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Several airlines had subscription offerings before Covid-19, including Air Canada, Lufthansa Group, and the Mexican low-cost-airline Volaris, Caravelo's lone customer. But Uriz said there's more interest now, adding his company soon will announce a second airline customer, wi

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