Guest Editorial: SpiceJet misses the mark with new Fly For Sure product?

IdeaWorksCompany, Editorial Comment from Jay Sorensen, President
First Published, 16th February 2016

It’s 2016 and I’m on the lookout for examples of Airline Revenue Innovation Champs.  At first glance, the new product announced by SpiceJet provides a compelling first candidate for 2016.  But it misses the mark because of too much fine print and ultimately represents a poor value for consumers.    

SpiceJet’s “Fly For Sure” offers a guaranteed travel option that pays out in the event the airline cancels a flight or delays it by more than 90 minutes, or if the traveler misses a flight by no more than 30 minutes.  For a modest INR299 ($4.40) fee, the airline claims consumers can buy extra peace of mind.  Travelers can identify and book their own alternative flight solutions in the event of a delay.

At a minimum, SpiceJet says it will refund travelers the price of their ticket.  Or they can buy a ticket (on any airline) and request reimbursement for up to twice the original ticket price.  Fly For Sure has been added to the booking path to provide maximum consumer exposure. 

However, the idea begins to fall flat when the terms and conditions are reviewed.  First, the guarantee exempts “force majeure” events beyond the control of the airline, which is defined to include weather, strikes, air traffic control delays, mechanicals, and even something benignly called “commotion.”  So what does qualify as a covered delay?  Second, instead of making an automatic minimum payout – perhaps in the form of a travel voucher – the consumer must file a long list of documents within seven days of completing subsequent travel.

What perhaps began as a good idea in SpiceJet’s marketing department morphed into something corrupted by the carrier’s legal department.  Instead, the airline should have prevented the addition of all the fine print, performed an actuarial assessment of the risk, and simply charged a higher price for the product.  That would’ve earned SpiceJet kudos for creating an inspired bit of ancillary revenue innovation.  Instead, the airline created a non-transparent product that gives a la carte options a black eye among consumers and government regulators.

Jay Sorensen, President of IdeaWorksCompany and author of this editorial, will be a featured speaker at Airline Information's Ancillary Merchandising Conference being held in Barcelona, Spain on the 21st and 22nd of April 2016.