Are airlines next to be disrupted?

Airlines are running the risk of being disrupted.

The now standard cautionary tale of Netflix disrupting Blockbuster is becoming a pattern across several industries; think Airbnb disrupting hotels, Uber disrupting the taxi industry and Apple disrupting the mobile communications industry.

There seem to be two patterns at work here:

  1. Increasingly customer-centric business models
  2. The convergence of exponential technologies enabling increasingly customer-centric business models 

1. Increasingly customer-centric business models

I was recently on a business trip on the opposite corner of North America, over 15 hours of travel each way. My experience was terrible. On my way back to the airport to catch my return flight, my journey quickly turned into what could have easily been a Seinfeld episode.

The check-in agent informed me that the flight I had booked was full and that they didn’t set aside a seat for me. This meant that I had to step to the side with my luggage until they had checked in everyone else. My only hope of being on the flight was if someone did not show up.

Not that it was any of their concern, but I had important meetings scheduled for the next morning, and a pregnant wife with our 15 month old toddler waiting for me to get home that night. Needless to say, I was not delighted.

2. The convergence of exponential technologies enabling increasingly customer-centric business models

Fast forward several hours later, and I finally made my flight. Upon retrieving my luggage, I opened my Uber app, and dispatched a driver. Within seconds, a friendly voice was ringing my phone confirming which exit I was near. No sooner did I exit the airport that a clean, brand new Lexus SUV was awaiting my arrival outside to take my bags and drive me home. And did I mention this experience came at half the fare of my usual cab ride? Needless to say, I was delighted. 

Only the most customer-centric will survive

If we look around us in today’s market place, there is a pattern at play. As Peter Diamandis, founder of Singularity University and the X Prize writes about in Bold, the impact of exponential technologies is increasingly democratizing the world around us. 

Some businesses are surviving until now in spite of themselves. Richard Foster, a lecturer from Yale School of Management estimates that the average lifespan of companies listed on the S&P 500 has gone from 67 years in the 1920s to less than 15 years today. He states that by the year 2020, 3/4 of those S&P 500 listings will be companies that we have not yet heard of.

In the face of all this rapid change and disruption, I believe that Netflix, Uber, and Airbnb are killing it simply because they are incredibly useful, and incredibly customer-centric. Technology just happens to be the enabler. 


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