An Idea for the Old-School Airlines

The old-school airlines like American Airlines and United are toast. Their cost structures are too high compared to the low-cost rivals like JetBlue or Southwest. There is no stickiness to their product: I'll fly whoever is cheapest and 99% of people paying their own way will do the same.

The funny thing about the airlines is the in-the-box thinking. (Personally, I have a theory that the industries that are hurting in America suffer from a lack of talented people entering them. For example, how many Harvard Business School grads went to work in auto manufacturing last year? http://www.hbs.edu/mba/yourcareer/statistics.html ... In Japan, they get SMART people to work for Toyota.)

The one strength of the old-school airlines is their comprehensive network. You just can't get certain places on Southwest no matter how hard you try. So, the old-school airlines should attempt to shift the industry by going to a completely different sales model that leverages this strength. The idea is that they introduce a pricing model that allows customers to purchase "miles" of flying. So, for example, you could purchase 5000 miles of flight for some amount that would allow you to fly domestically anywhere on American using those miles. You'd obviously pay more for international miles.

Upsides: better cash flow (people pay ahead of time or as monthly installments!), leverage their strength of network, better lock-in ("I've got 1200 miles left on United, let's fly them.")

Downsides: doesn't do much for irregular travelers, can't get as much revenue from the big-dollar paying expense account people (are there any more left, really?)

This idea may not work, but anything is better than what the airlines are currently doing (which is doing the same thing repeatedly and hoping for a different result!).