Levy, who at the time was working as a consultant, repeatedly would end up stuck in some remote city because the flights he wanted were sold out. "I thought, how is it possible airline ticket sales don't operate like a real market? In an ideal world, just before an overbooked flight, I would be able to buy a ticket from someone for whatever the going rate is," says Levy. "It seemed so simple."
But for years airline economists have known that by imposing all sorts of restrictions on tickets, it is much easier to capture customers and predict revenues. Although the perception is that security concerns drive these prohibitions (like preventing you from transferring the ticket to someone else), in fact there is no real reason why you shouldn't be able to give your ticket to your sister if you can't make a trip. Airlines could still make the passenger who boards the plane show an I.D. card, so of course they would know who is on the plane.
Maybe showing that this simpler system does work might help chip away at those silly "security" questions the gate agents ask before you board (When's the last time a terrorist admitted to not packing his own bag?) This week Levy took a step closer to his dream. He is the co-founder of FairAir, a new service that provides the country's first fully- transferable airline ticket. That's right: you can now buy a ticket on FairAir.com on one of the four participating airlines (Northwest, America West, National and Midway) and you can do what you wish with it. You can use it, you can give the ticket away by legally changing the name on it, or you can actually sell it on the open market through FairAir's website.
FairAir's tickets are aviation's equivalent of an opera ticket or a seat at an NFL game — you have the right to occupy that space on that flight. Or not. "We're recreating a secondary market for airline tickets. That market used to exist on bulletin boards and in newspapers," says Levy. Just think: you might be able to pick up a bargain when someone has to get rid of a ticket, or you could actually buy a seat on that sold-out flight (for the 'right' price).
FairAir, which deals only in airline tickets and does not aspire to be a full-service travel agency, makes its money with transaction fees. It charges $9.95 to buy or sell a ticket on its easy- to-use site, and changing the name on a ticket costs a minimum of $24.95. Vice president David Glickman says test marketing has shown two strong categories of buyers: individuals who are buying tickets as sort of insurance (knowing they will probably be able to sell them if need be) and group travel (since often it is not known until the last minute exactly who will go on a trip).
There are two clouds darkening FairAir's skies. One is their modest size: even with the nation's fourth largest airline in Northwest, the scope of the website is still very limited, and therefore, so is their potential secondary market. If you are in the prominent cities (for example, Minneapolis for Northwest or Phoenix with America West), FairAir might be great — if not, you might be out of luck.
The second item is the bigger obstacle. Levy says the strategic vision of the company is to eventually provide this technology to airlines and web-based travel agencies, which would allow them to create secondary markets on their own sites (FairAir would essentially be the backroom support service). That could mean just when the little guy gets used to controlling his own ticket (and his own destiny), back into the airlines' grasp he is pulled.
Let's hope Levy lets us stay out here and fight a while longer.