Would you pay $19 for a ticket out of airport hell?
By Justin Bachman Bloomberg
An annual ritual is unfolding at U.S. airports: Flights are
canceled, and disgruntled masses throng ticket counters and flood
airline call centers hunting for alternatives.
A Boston-area startup, born of a disastrous ski trip 10 months ago,
aims to offer an alternative. For $19 to $34, the company, Freebird,
guarantees it will buy you a ticket to your destination, regardless of
cost or carrier, if a flight is canceled or delayed more than four hours
or a connection is missed due to an airline’s delay.
This can avert what usually happens when a trip is disrupted: An
airline automatically books you on another of its own flights,
regardless of the time, connections, or your own wishes. That’s because
airline computers typically search for the widest availability when a
cancellation occurs, so you don’t always get the very next flight if
there’s a chance the carrier might sell that seat for a premium to a
last-minute traveler. In these cases, passengers typically queue up in
the airport or on the phone waiting for an airline employee to change
the itinerary.
What also happens: Seat options are limited and people get frantic,
spending hundreds or thousands of dollars for a ticket on another
airline. There is a wedding, a funeral, a cruise ship, or an ill loved
one involved. The financial hit can be harsh.
“There are certain extreme events where everybody feels helpless,”
said Ethan Bernstein, a former Expedia M&A executive and the co-founder
and chief executive of Freebird, which is based in Cambridge, Mass. In
February, he and some friends were returning to Boston from a weekend
Colorado ski trip when one of the two nonstop flights the group was
booked on was canceled. One friend got assigned a new flight, 35 hours
in the future, while another paid thousands of dollars to get home via
New York.
“When the dust cleared, one thing was clear: Everybody had a
terrible experience,” Bernstein said.
Freebird is much like an insurance product in that the buyer aims to
protect herself from some ugly outcome. The company resists that analogy
because there is no claim to file for reimbursement, unlike most of the
travel protection policies sold by companies such as American Express
and Allianz. Freebird touts “three clicks” to a new flight: You pay the
fee, they take the hit for a new ticket.
The closest analogy is probably a product from an insurance industry
heavyweight, Warren Buffett. Like Free-bird, Berkshire Hathaway’s
AirCare monitors flight disruptions and transfers money to its customer
during a trip. Unlike Freebird, AirCare manages risk by disqualifying
certain flights and certain airport connections and limits the number of
flight legs per day it will cover.
In an insurance model, most of the time nothing happens. Freebird
will pocket the cash. The business’s Achilles heel lies in its software
programming and understanding of how airlines’ performances vary greatly
during foul weather-what the industry calls irregular operations.
--
*================================================ Duane Whittingham -
N9SSN (ARES/RACES, EmComm, Skywarn & Red Cross)
http://www.radiodude.info ================================================*
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