Air Lines Business problems and a viable solution

 Air Lines Business problems and a viable solution

 

Pointing system…. Is the solution to all headaches?

How many passengers per year in each country?

How much flight hours used?

How many Flights used?

The Airline Industry can improve its profits by leaving aside some technicalities, such as:

1-      The need to book a flight in advance “while” offering special prices

2-      The difficulty in changing planes or destination without  high penalty

3-      The impossibility of going from one airline to another with the same ticket

The Airline Industry can make money by following these steps:

1-      Creating a Central Travelling Bank for all transportation

2-      Using a pointing system  of $1.00 per point,  available to passengers all over the world

3-      Allow passengers to change their destination at the airport without penalties

4-      Allow passengers to use their points to any destination, with any airline, anytime, anywhere.

5-      Each 100 points would cover 1 hour flight to any destination one way.   Only using increments of 50 points. If the flight regular time is 7.6 hours it is counted as 8. It the flight is 45 minutes, it counts as one hour. A flight point table will be used by the Central Travelling bank with the information for all available flights by every Airline in each particular airport.

6-      For Round Trip and International Flights, 100 points covers 1.5 hours.

7-      Points are accepted by all airlines, or transferred from one to another.

 

Procedure:

A passenger would purchase in advance a travelling card and make a deposit of $1000 dollars into the Central Travelling Bank.  This will allow 1000 points and a passenger can travel for 10 hours if going one way, and 15 hours if purchasing a round trip. The computer will keep track if the trip is a round trip or one way.

At any connecting airport, due to climatic conditions, or a change of mind, a passenger can change his plane to any different destination, by receiving credit for his not-travelled destination, and using it towards his future destination within any airline. In other words, a passenger can buy a ticket Delta Airlines from New York to San Francisco,(ONE WAY) with a connection in Atlanta. This trip when direct would cover 2600 miles, and it takes … 6 hours and its price is 600 points one way. But if it is scheduled in advance only 900 points round trip. In other words, if scheduled in advance, the amount of 600 points would be taken from the passenger’s travel card.  In Atlanta the passenger decided to change his departure time, or use a different airline. He had travelled 750 miles, or 2 hours, and its cost should be 200 points, which will be charged for 200 points payable to Delta. Now, by taking another airline, in a different time of his choice, the remaining of the trip is 2,140 miles, or 6.0 hours, which is equivalent to 600 points, and it will be debited from his card. By making this change of mind, the passenger will spend 800 points one way, but is pleased with his decision. Now he needs to spend at least 600 points to return, making this unplanned trip cost a total of 1400 points minimum.

The time to cancel has to be 30 minutes before departure. It can be done electronically, or while inside an airplane by using the internet.  A screen will announce departing flights, available seats, and the amount of points it will require half an hour before departure. So stand by passengers can be booked by presenting their card to the attendant in the last minute. It will work like a waiting list, but last minute passengers will be charged one way trip.

Advantages:

It will bring fair competition among airlines.

A passenger can decide to travel in the last minute, by driving to the nearest airport and observe his choice of destination without the burden of paying double fees for a trip and wait there for the nest available destination. A passenger can go from Atlanta to NY, and take a direct plane to San Francisco and arrive there hours before his appointment. If he waits in Atlanta for an available plane to San Francisco, he could miss his appointment.

It will bring options to passengers, and costs will be accordingly. This alone will increase traffic because people like to make last minute decisions.   

A passenger with access to the internet can book his own paperless trip and present himself at the counter to obtain his travelling pass.

Frequent travelers who reach Airline Mileage demand per year will be credited points towards his card accordingly.   

First Class passengers will embark after all passengers have been situated, so the entire corridor can be disinfected and doors closed for the flight. It doesn’t make any sense first class passengers been watched by everyone inside the airplane, or people passing through their aisle.  New airplanes have to have a separate entrance for economy passengers, and it shall be done in most airports.

Profits…

*CARGO!! Cargo is the HUGE money maker in the airline industry. When my airline first started they would take off on a transatlantic flight with literally 8 people on board!! Why? The cargo hold was full making it more worth to take  8 people and cargo!

Various airlines buy their airplanes when they are new, to use them for several months...and then lease them out to other airlines....gaining a deal of interest from them...

According to the WSJ, the amount of net income made on one flight is approximately $164.  This assumes that the flight has 100 passengers.  This is as close to being perfectly competitive as you can get.  This site, lists "Many" airlines.

Bellow a few comments taken from people referring to airlines profits and losses…

 

“If you look at the overall "profit and loss" statement for the US airline industry, you'd find that since the beginnings of airline aviation when Delta stopped dusting crops and started carrying passengers, the airlines as a whole have never made money. There are some exceptions, Southwest, Jet Blue, but for the most part the airlines were supported by government subsidies during the first fifty years or so. Since deregulation in 1978 though, many of those dinosaurs are dying off and the lean and mean will create an entirely new industry”.

Most airlines do not buy the aircraft outright, they lease them. Those payments are less than what the mortgage payments would be.

Tickets are sold on a scale. Ever try buying a ticket close to the date you want to travel? It's called a "walk-up" fare, and it's very expensive. With a pointing system, this will not exist.

Other routes. While an airline my post dramatic losses on some routes, others are very lucrative and post very nice profits offsetting any losses from the losing routes.

Goverment transportation. Did you think the military transported all those guys to Iraq? They get premium prices to charter an aircraft for Uncle Sam.
 

Load factors. It will be higher with a pointing system, for it will be like selling cars on volume. You get a better deal, and they still make money because every seat in the airplane is filled.

How many people are using Airlines today?

For the last few years the United States had a yearly average of 730 million passengers using Air Line services. Brazil averages 95 million passengers per year. China averages 350 million per year. France averages 65 million. Germany and Japan average the same 100 million passengers per year.  The United Kingdom averages 120 million passengers per year. A list of Air Transport passengers carried you can find at the web site of the World Bank Data. Link: http://data.worldbank.org/indicator/IS.AIR.PSGR

It is fair to say that the number of passengers doesn’t equal the number of travelers, for; one passenger could have made more than five travels during a current year.

I am from Brazil and a trip USA to Brazil covers 5000 miles and takes 8 hours. It should cost either 600 points one way, or 900 points round trip. Today it cost $800 round trip and $650 one way. No difference in there.

I have to mention that in time of high demand or low demand POINTS CHARGED WILL BE THE SAME as any other time.  Plane schedule will not be decreased, but each company has the right to freight a plane to any “open destination” in accordance with the demand. For This reason a plane may stay in an airport waiting to be freighted by the airline, to any destination.

People can be at home waiting for plane schedule wherever they are.

For example: If you are in Columbus Mississippi and want to go to New York, but scheduled planes are only 2 per day. In this case you have to book in advance and be at the airport 1.5 hours before departure.   But by checking at the Central Travelling Bank web site, you learned that another airline is offering an earlier flight, and it just occurred that particular day. It was not a scheduled plane. For this reason, non-scheduled planes that arrive at any airport must stand by until a freight is completed, with cargo and people to any destination. You have a choice to change planes and take the next flight. These flights are scheduled with 3 hours in advance every time. The list is available every minute changing planes or destinations and adding planes and destination, and passengers can make their change at the last minute (half an hour at the counter for those who passed security) and 2 hours using the web site.

 

In summary, it just occurred to me that this system of aviation is not a simple matter for both, airline and passengers. A viable solution is the use of pointing systems using standardized prices all over the world, and a friendly way to change routes for passengers as demand requires.

At the airport an officer would announce:

“We have a flight with destination to San Francisco, Non Stop and we have 20 available sits”.

A large screen will show all flights available to everywhere leaving in the next hour giving time to last minute change.

The industry will make money because people will travel more often.

Milton