Memphis has a history of being a disruptive force – and in the entrepreneurial community locally it’s almost become cliché to cite our success stories (fill in the blank from grocery stores, to rock and roll, to Fedex.) That being said, I believe there is an opportunity to use our unique circumstances to disrupt another industry while creating a net benefit for Memphis and Memphians. That industry is Air Travel.
Air travel is universally reviled, from reduction of customer service and increased fees and “temporary” offset charges that become codified as standard operating procedure ($25 check bag fee, anyone?) and it all comes down to a perception of a lack of fairness. Airfares are anything but fair, with inexpensive lost-leader pricing for advanced sales giving way to price-gouging for last-minute tickets, as ultimately the airlines have to get an average of X per seat spread between theses price differences. But the feeling of unfairness is heightened here in Memphis where we’re treated as an afterthought by major carriers, especially since the departure of the NWA/Delta hub. Even the arrival of Southwest into our market has not given us the airfare reduction the public expected. I don’t need to go into the economics of why it’s cheaper to fly out of Little Rock or Nashville – it’s not important to my proposal – because on the surface our new airline would not be competing for the local routes.
I am proposing a new airline – with a new model – using Memphis as a hub for travel between major destination metro areas (and expanding as we grow.) Hub and Spoke is nothing new, FedEx is a hub and spoke operation, Delta hubs out of Atlanta and Detroit, USAirways out of Charlotte, United out of Denver, etc. But here’s how we break the model.
We charge one price. For any ticket. At any time.
I’ll explain this with the simplest form of our new airline (Let’s call it DayAir) with eight major destinations. Los Angeles, San Francisco, Seattle, Denver, Chicago, New York DC and Miami. Day air would have planes originating from each of these metro-areas each morning, arriving in Memphis within a one hour window, 12:00PM to 1:00PM, and those same planes departing back to their city of origin within the 2:00PM to 3:00PM window.
For a set fee – all the way up to the day of departure – roundtrip travel between these cities would cost $450. LA to Chicago? $450, SF to DC? $450. Are there cheaper routes between these cities? Yes – if you buy far enough in advance, but after a certain threshold (say, the last week before departure) the standard airline model makes our alternative the better choice. And by keeping our seat inventory relatively low we can make sure the high occupancy needed to make the airline a viable business.
But what about Memphis? Here’s the good part for us, our fixed round-trip fare would be literally half the “coast to coast” price. Memphis to LA round-trip? $225 – Memphis to NYC? $225. Feel like going to DC this weekend? No worries, buy a ticket the day before, you know how much it will cost – same as always, $225.
Finally, and at least as important, is for people visiting Memphis. Want to come to Memphis from LA? From NYC? From Chicago? $225 round-trip to come to the bluff city, anytime.
This is best illustrated in this chart. The two flat lines are the DayAir fares, and the green curved line represents standard airfare increased from 4 weeks before departure on up to travel day.
Let’s reiterate how all this would benefit Memphis.
First – anyone flying to Memphis from one our serviced metropolitan areas gets here for 1/2 price, allowing us to promote Memphis as an easy and affordable travel destination. This gives us more tourism dollars, more exposure to our city.
Second – Memphians will be able to fly round-trip to any of our metropolitan destinations for 1/2 price, with the secondary effect of driving down pricing on competing carriers serving similar routes – a win/win.
Third – easy and affordable flights to and from Memphis helps our businesses attract talent and makes basing a business in Memphis a better choice.
We have a big, beautiful, underserved airport – and a huge opportunity to change air-travel, benefit Memphis, and lead the way as a disrupting force.
James Sposto is a digital media entrepreneur, designer, filmmaker, music promoter and Memphian-by-choice.