Instructor: David Schuff, Section 003

Airbnb’s next disruption? The airline industry.

Recently, Airbnb co-founder and CEO Brian Chesky hinted at the company’s plans to establish an airline and enter the “end-to-end” trip business. Currently, Airbnb uses an online platform to connect people looking to rent their homes with people who are looking for accommodations. Airbnb creating an airline would likely cause a great disruption in the aviation industry. By establishing an airline, Airbnb would become an online travel hub and expand their services. According to reports, Airbnb has been building a flight booking system since December 2016.

Ten years ago Airbnb disrupted the hospitality industry with their innovative accommodations platform, which is now the largest in the world. Now, Airbnb offers the ability to book tourist experiences and business travel accommodations. The addition of an airline would further expand Airbnb’s reach within the travel industry. Airbnb’s strategy to build a one-stop shopping for travel seems similar to Amazon’s strategy. Unlike other one-stop shop travel websites, however, Airbnb would create their own airline. Airbnb has a similar valuation as the major U.S. air carriers, but unlike the major legacy airlines, is a private company.

What do you think of Airbnb’s strategy to become a one-stop shop for travel?

airplane photo

3 Responses to Airbnb’s next disruption? The airline industry.

  • I think this is very interesting. Personally I did not expect this but I think it is a good idea. It will generate revenue and act as a marketing tool for their AirBnB housing service. It is exciting to see the company expand and I am interested in what will be next. Personally I think once autonomous car become popular (and legal) their platform could be adapted to sharing your driver-less car. Initially these cars will be very expensive, but if I could rent it out to people like a taxi service I could make a lot of my investment back. I think they are well suited to make this happen and it could be a big threat to Uber. We will have to wait and see.

  • I do not think that AirBnB should enter the airplane industry. The barriers to entry are so high that so many airlines fail. Southwest is the only airline that actually profits from the industry, while the others are barely able to break even. Additionally, Uber did attempt something similar for the Sundance Festival, where they rented out helicopters. This attempt failed due to a violation of the local county code. Even though this idea most likely is not feasible it could still be interested where this company goes in the future.

  • Hi Marlea! This is very interesting. While the idea of Airbnb creating its own airline is exciting in its drastic change of the company’s value proposition, I understand Leah’s concerns in the comment above. This type of vertical integration of the value chain is very unique which will make the process compelling to follow, but I can’t even begin to imagine the costs associated with entering such a risky industry. It makes me wonder what value Airbnb believes it can derive from the integration such that those costs are bearable.

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