Our chat with Jeff Klee, CEO at CheapAir.com and AmTrav
From A Traveller’s Lens
“It is an outrage that in 2015 it still costs 3% to process a payment, points out Klee, who is all set to complete three decades in the travel industry.
To its credit, CheapAir became the world’s first online travel agency to accept Bitcoin for flights in late 2013.
Klee believes that Bitcoin, and more specifically the technology behind it, is the biggest thing to happen to payments since the credit card.
Klee spoke to Ai Correspondent Ritesh Gupta about the status of air travel, “crazy fee structure” pertaining to the way payments are handled, why he has a problem with code share flights and lot more.
Ai: What do you make of air travel at this juncture?
Sometimes I feel like the only one alive who thinks air travel is actually easier today than in the pre-9/ 11 days. If you talk to many travelers both frequent and infrequent you still hear flying portrayed as a tortuous experience.
It kind of reminds me of that great bit by Louis C.K. popular on YouTube, where he talks about air travel and technology and how “Everything is amazing but nobody is happy.”
To be fair, not everything is amazing and there is understandable resentment from travelers who have to pay for things like bags and seats that used to be free.
But I still think there is a lot to be excited about with respect to how far air travel has come and where it’s headed, particularly when it comes to technology. Things like mobile check-in, so you don’t have to carry any papers around; instant text alerts so you know right away if your flight is delayed; streaming movies or Live TV which make air travel much less monotonous; and WiFi that is now almost ubiquitous. All of these things were rare or non-existent 5 years ago and now we take them for granted.
As a seller of air travel, I love that airlines are finally taking real steps—and spending real money—to differentiate their product. More so than at any other time since I’ve been in this industry, there is a real difference between the product that is offered by say, Delta, versus jetBlue, versus Southwest, versus Spirit.
For the right situation, each of these may offer a compelling value proposition and it makes our job much more challenging (and interesting) to try to match the right the traveler with the right product.
Ai: So where can airlines improve upon their operations in general?
I think airlines have largely done a good job making the typical flying experience easier and more enjoyable. But when things go wrong, they still tend to go really wrong, and the carriers don’t do a good enough job handling irregular operations.
When flights get canceled due to a storm or other emergency, it’s still the case way too often that a traveler can’t fix the problem himself or herself by going online or to an app. Way too often, it is still necessary to call and hold times during these periods can be maddening. Why can’t an app be empowered to make the same changes, using the same guidelines, as the agent who answers the phone after 90 minutes? I think they’re all working to get there and there’s been more progress than ever in the last year, but there is still a lot of work to be done.
Ai: What would you rate as the biggest breakthrough within in the gamut of payments in the travel sector and why?
It may not be obvious yet but I think Bitcoin, and more specifically the technology behind it, is the biggest thing to happen to payments since the credit card.
It is an outrage that in 2015 it still costs 3% to process a payment. That fee is a relic from a time when credit cards had to be hand swiped and payments manually processed. The big banks have gotten away with maintaining this crazy fee structure for multiple reasons, most importantly that there hasn’t been any other viable alternative. The concept of decentralized, peer-to-peer payment processing without a big central bank in the middle taking a cut holds enormous promise. Bitcoin as a currency may or may not reach the potential it’s supporters hope for, but the technology behind bitcoin can still be used to one day process payment in any currency, and disrupt an industry that desperately needs some disruption.
Ai: How do you think alternative payment methods are improving the passenger experience?
There are few things I find more frustrating than trying to make a purchase on a mobile phone and having to type my credit card, expiration date, security code, name, and address in order to submit my purchase. That’s why I love the convenience of being able to make a Bitcoin purchase with just one click or tap, without having to provide any of that personal information. To be fair, there are other technologies that also facilitate one click payments like Apple Pay, PayPal, and Google Wallet. I expect we will soon reach a point where consumers won’t accept any payment method that can’t be transacted with securely with just one or two clicks. If indeed we are one day buying airline tickets from our watches, we better not have to type answers to a bunch of questions about where we live.
Ai: What according to you is the over-rated concept/ theme in the travel sector?
I have a big problem with code share flights. Airlines are going to such great lengths to convince the world that they are not a commodity and that their product is different – and they are finally succeeding in that respect. But at the same time they are willing and eager to slap their code on 5 or 6 completely different airlines, with completely different products, and brand those seats as their own. What makes codesharing even worse is that very few of these marketing partnerships come with any kind of sophisticated P.S.S. system integration. As a result, check-in, seat assignments, ticket changes, or IROP recovery are rarely as seamless as a traveler would expect. Codeshares may be great financially for airlines, but they often create headaches for their customers.
On a totally different subject, one of my least favorite buzz words that I keep hearing is “Mobile First”. Every day another company is announcing that they are redesigning their web site to be “Mobile First”. I think it’s great to optimize your mobile experience, but if this means you are going to strip down your desktop and tablet sites to mirror what you did for mobile, you are doing your users on those platforms a disservice. A phone, a tablet, and a computer are three different devices. Consumers today rightly expect different experiences on different devices, designed specifically for the advantages of each platform. I know that’s easier said than done and, as part of a big site refresh we are working on, we’re working hard to get it right ourselves.
Ai: What according to you is the next big thing in air travel?
I remember when I was a kid hearing an “expert” talk about the impending “atmospheric planes” that within a decade would dramatically increase the speed of air travel. By launching you up into the atmosphere and then bringing you down at your destination, these space planes were going to be able to fly from Tokyo to Los Angeles in just a couple of hours, opening up fantastic possibilities like a “Guaranteed Yesterday Delivery” from FedEx or a guy saying to his wife “I better get to the airport; I have a dinner yesterday night in Hollywood.” I’m still waiting for that plane but am resigned to the fact that the next big thing might not be as grand.
Still, there are no doubt brilliant people out there working on ideas that I couldn’t possibly conceive of, but which years from now will seem obvious in hindsight. Although I’d put myself in the hardly qualified category to predict the next “big thing”, I do see some areas where the ball will probably be moved forward in the next 12-24 months.
I think there are potentially very big things that can happen in the corporate travel space. I expect a progressive travel management company or two to come along and really shake up a value proposition that hasn’t changed much in a couple of decades.
There are a few very intriguing attempts going on right now to “Uberize” private jet travel, which I think could really have a big impact, albeit only for the very top end of the market.
Some of the recent rulings regarding payment steering could open the door for someone to take a really bold step with respect to payments.
And, of course, Cuba will continue to be a big topic of interest.
LinkedIn profile: https://www.linkedin.com/in/jeffklee
Twitter handle: @CheapAir