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For business travelers crammed into crowded rush-hour cabins, it may come as a surprise that the eight major US carriers fly jets at an average of only 65 to 70 percent capacity. When marketeer Jay Walker realized this, he began devising a system using the Internet to offer consumers a potential deal on the millions of seats that fly empty.
The result, Priceline.Com, debuts this month, and, according to Walker, will enable consumers to name the price they'd be willing to pay for airline tickets. At the company’s Web site, you simply provide your itinerary, the price you’re willing to pay, and your credit card number. If an airline accepts, Priceline.Com will get back to you within an hour with a nonrefundable ticket.
"This is not for the businessperson," says Walker, whose Stamford, Connecticut-based Walker Digital Corporation lined up 12 investors, built a US$25 million budget, installed 80 Web servers, and reached "solid" agreements with all the major carriers prior to launch. "We're going to reach what we call the VFR crowd – the visiting-friends-and-relatives crowd. They're the kind of people willing to say, 'For the savings, I'll take a connection in Minneapolis.'"
By the end of 1998, Walker expects Priceline.Com to ring up a million hits a day for the 1,000 to 3,000 tickets available daily. To get those hits, he's spending $10 million to advertise this spring. Says Walker, "The airlines like this system because it gives them an opportunity to add incremental revenue without disrupting their retail-fare system."
This article originally appeared in the March issue of Wired magazine.
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