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By Root 794 0

It might see a surge in demand for a destination, perhaps for reasons it could not predict (a new conference or festival, good media coverage for a getaway, a travel bargain, or currency fluctuations unleashing pent-up demand). With sufficient notice, the airline could add capacity, which would keep it ahead of arbitrageurs. The airline always controls supply and now it would know more about demand. Similarly, if a flight were light the airline could offer passengers alternatives at big discounts to enable it to cancel the flight and reroute equipment long before departure, creating savings at the bottom line. The airline would increase efficiency and profitability; the passengers would get a dividend; and the environment would get a break. An open and flexible social marketplace could transform the airline economy.

Why shouldn’t airlines also turn frequent-flier miles into an open market? In these miles, airlines created a virtual currency with greater reach and value than the fake currencies of Second Life or Facebook. But miles are essentially illiquid. Airlines make it next to impossible to get frequent-flier seats unless you’re flying to Krakow on Christmas Day a decade hence. Their other offers—use miles to buy a TV—are bad deals; Google search tells me so. Miles have been devalued to the point that they offer ever-lessening incentives to choose one carrier over another; they no longer act as the decommodifier the airlines intended. So open it up: Let us bid on frequent-flier seats, upgrades, and silver status with miles. Let us barter miles with each other (I’ll sell you this iPod for miles I need for my vacation). The currency would regain value. It also means more miles will be redeemed, but that sword hangs over airlines’ heads in any case.

These exchanges bring subtleties. In some cases, I won’t want to reveal my identity (telling strangers I’m leaving town); in others, I will (because I’m doing business). As seats are traded, identities and credit cards must be in the system for security. And so on. Yet creating such a network could rebrand the pioneer as the social airline—the fun airline, the nice airline, the airline where I’m back in control. (I would use the social network to start a movement to save my knees from the asses who slam their seats back into them. In an open market, I might even pay them not to.)

Now imagine if airlines used these networks to capture the knowledge of their smart-about-traveling crowds and convert that wisdom into value. On our return trips, airlines should ask us to rate and review the hotels and restaurants we frequented. They should ask natives to share insider advice on eating and shopping in their towns. Similarly, hotels should capture guests’ reviews of nearby restaurants (as Hyatt has begun doing with its Yatt’it travel community), and cruise lines should gather shopping tips for every port. Travel companies have currencies to pay for the information: They could reward us with frequent-flier miles or discounts on our next trips. And because they know who we are, they could anonymously aggregate data to enhance the information, as I suggested for restaurants: “American Express Platinum customers recommend….” Or: “Canadians traveling to Florida really like….” Airlines could collect an incredible database of live knowledge from real travelers with fresh information. Over time, they’d outdo TripAdvisor and Fodor’s—or the airlines could supply them with branded content, which in turn promotes the airlines. The airlines themselves become publishers by listening to, gathering, and sharing the knowledge of customers.

The key to remaking an airline in this mold is giving control, respect, and organization to the customers, helping them find each other and organize into conversations and markets. The customers have value to give. Airlines can capture that value in new ways to improve prices and the bottom line (see the discussion of Ryanair in the chapter, “Free is a business model”). But passengers won’t give their value if they are not valued, if they are still treated as