Air travel and COVID-19: Airlines offer unlimited flight passes, but they've been known to backfire

Unlimited flight passes are back in fashion thanks to COVID-19, but airlines will need to learn from the mistakes of the past to ensure they don't backfire.

With air travel suffering from a massive downturn due to COVID-19 and carriers struggling to generate revenue, some have come up with innovative ways to make some money.

We've seen Qantas selling off its excess business class pyjamas and amenity kits, and some airlines launching sightseeing flights to nowhere. Meanwhile, Thai Airways opened a restaurant serving plane food, and various in-flight meal suppliers have offered delivery of frozen meals.

Several airlines have come up with a new way to sell flights: unlimited flight passes.

Air Canada is the latest carrier to offer this type of fare, with its Infinite Canada Flight Pass announced last week.

The pass allows passengers to pay a single flat fee and fly as many times as they like within a set period - one, two or three months - within Canada. The passes start from $2260 per month and passengers can change or cancel their flight up to an hour before its departure time without penalty.

The pass is only available until September 23 and is aimed at giving its users "flexibility and certainty" according to Lucie Guillemette, executive vice president and chief commercial officer at Air Canada.

Air Canada isn't the first airline to offer this option to passengers. In March, just as the COVID-19 pandemic began to bite air travel, Malaysian budget carrier AirAsia offered an unlimited international flight pass to Malaysia residents for just 499 ringgit ($167) for one year.

The airline later offered a second unlimited flights pass for 399 ringgit in June for flights to 16 domestic destinations.

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China's largest airlines have also launched various unlimited flight packages to help restart domestic travel in the wake of COVID-19. China Eastern initially offered a weekend-only unlimited travel pass, but due to its popularity, it changed the offer to only apply to weekday flights.

The China Eastern change is one indication that these unlimited flights passes can backfire  if too many people sign up for them or individuals find ways to exploit them that the airlines didn't anticipate.

Back in the early 1980s, American Airlines saw an opportunity to quickly raise revenue by creating an unlimited travel pass for life. The AAirpass cost a whopping $US250,000, but a handful of wealthy frequent flyers took up the offer, some paying an additional $US150,000 for a companion pass.

It wasn't until the mid-2000s that someone at American Airlines did some analysis of these unlimited flights for life and how the purchasers were using them. They found just two of the AAirpass holders were costing the airline at least $US1 million a year, each.

Those two passengers were later accused of fraud by the airline and for breaching the rules of the pass (by, for example, selling their companion seats).

American Airlines stopped selling the passes in 1994.

Given the time limits placed on the current crop of unlimited flight passes from airlines around the world, the lessons of the past have probably been learnt.

See also: How two men with unlimited flight passes cost an airline millions

See also: What happens when a plane gets scrapped

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