Fliers Will Pay More For Faster Long Haul Journeys
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How much is your time worth? According to the results of a study conducted by travel search portal Skyscanner, when you are traveling, it is worth about $8 per hour.
How much is your time worth?
Using its Travel Insight program, which tracks millions of searches and bookings on its site each month, Skyscanner analyzed the 100 busiest long haul routes in the world. The study compared the length of the total journey with its cost. On average, people who booked these long haul trips were willing to pay $8 per hour to make their journey shorter. “Shorter” trips could mean a faster layover, a more direct route or less overall flight time.
Different routes, different values
Skyscanner is a global search engine, so it has the ideal setup for undertaking such a study.
However, the wide range of data also means that the numbers varied wildly depending on the region or route. On some routes, time was much more valuable to fliers than on other routes. For example, on the Kuala Lumpur-Bahrain route, which lacks any direct service, people are willing to pay $26 per hour more if it means a shorter layover or a more direct trip.
On more competitive routes, such as Buenos Aires to Los Angeles, fliers showed much less willingness to pay in order to shorten their trip. On this particular route, saving an hour of travel time was worth less than $2.
Variables like overall length of the trip, whether it was for business or leisure, the destination and the number of airline options available all played a role in the final dollar-per-hour figure for each route. So, $8 per hour is not the universal formula for airlines to price flights on every route.
Providing more value to fliers
The Skyscanner survey did make one thing clear: travelers value their time and they are willing to pay more if it means they will get to their destination faster.
Skyscanner’s head of business development, Faical Allou pointed this out in a statement announcing the study: “This information could play a key role in airlines’ and airports’ decisions. Understanding the value passengers place on time for different routes can reveal great commercial opportunities for carriers.”
The results of the survey are good news for airlines, who have been searching for ways to add value to their product so that they can get away from competing with other airlines on price alone. The time value idea illustrated by the Skyscanner data gives them another angle to compete with.
READ MORE: Is United's Transpacific Bet Paying Off?
Airlines Know All This
Airlines are already, in a way, aware of the concept of time value.
Delta, for example, has been touting its vastly improved on-time performance in recent months. Once one of the worst performers in this category it is now one of the most punctual airlines in America.
Does this mean that Delta can charge more than perpetually delayed Spirit?
On-time performance is certainly a selling point, but it is part of an overall picture of value that full service airlines seem to be trying to paint. Delta’s improved seating options, United’s new business class, American’s improved in-flight food and JetBlue’s enhanced IFE system are all examples of this trend.
More direct flights on the horizon?
Offering more direct routes with shorter flight time or shorter layovers could be another way to give fliers added value.
From the results of the Skyscanner study, it is clear that fliers are willing to pay more to get to their destination more quickly.
One of the more interesting take-aways from this survey, is that it confirms airlines’ idea that it is worthwhile to launch direct flights to secondary cities. Untied, for example, is doing this in China with flights to Xian and Hangzhou from San Francisco. Another example: Delta adding flights to Scotland instead of London.
If there is enough demand on a route, then people seem to be willing to pay for more direct service.
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