Hail the air taxi: Airline wants to charge passengers by the minute

It had to happen. One new airline in South Africa has decided that the way to instill a sense of value in the minds of potential consumers is to rip a page from the taxi playbook: Charge by the minute of travel.

It's smart, at least on paper. Passengers buy a "starter pack" of minutes, which include all surcharges and taxes, and use them the way you might use a pay-as-you-go cell phone plan. All routes are worth a set number of minutes, and minutes would cost 5 rands each (or about 50¢, thanks to South Africa's weak currency). One of the proposed routes will be between Cape Town and Durban, and that is charged at 125 minutes. (If the plane is late or has to circle the airport for an hour, presumably the price wouldn't change. The flight would always be worth the same number of minutes.)

The carrier, called Airtime Airlines, was supposed to start selling tickets this week and begin flights on January 18. But paperwork has stalled, and right now, things are in doubt, even though its website is still up.

But I wouldn't be surprised to see the idea resurface someday. Set-price flights are a novelty in an industry built on unpredictable price fluctuations. They have the potential to give customers a strong sense of value. You know what you're going to pay for any route, and that it's not going to go up, if only you can nab a seat. Changing airfares and last-minute gouging have been one of the main things that have driven American consumers to distraction over their travel costs. Unfortunately, they are also now a way of life for our airlines, and a principal way that traditional carriers have met their costs. This system would eliminate that road.

That's great for consumers, until the day Airtime flies too many empty planes and can no longer afford to keep going. Which would happen if its giant competitors decided to slash fares on the same routes in order to drive it out of business. This high-risk structure would mean that the airline would have to make sure its flights were always as full as possible, with little margin for error if prices are going to be kept low enough to be appealing. Its owners might eke out a steady profit in that case, but likely nothing to thrill investors, and they aren't going to make a killing in the current market.

Then again, if rates are truly sensational and the masses embrace the concept, pay-as-you-go travel could be contagious. Cabs are already charging in increments of distance, so the idea isn't completely foreign to us.