Chris Anderson’s Long Tail theory shook up business thinking in 2004. Two decades later, it holds the key to aviation’s biggest untapped opportunity: connecting regional cities.
The Long Tail, Explained
The Long Tail is a business strategy that allows companies to realize significant profits by selling low volumes of hard-to-find items to many customers, instead of only selling large volumes of a reduced number of popular items. Chris Anderson argued that products in low demand or with low sales volume can collectively make up a market share that rivals or exceeds the relatively few current bestsellers.
Hubs Thrive, Regions Struggle
In aviation, the bestsellers are the hub-to-hub connections that make airlines work financially. The market has shifted toward hub-to-hub connections for decades now, and Covid-19 really acted as a milestone for this change, as airlines had to focus on the most profitable routes only. This meant that regional flying was almost devastated, and it still hasn’t recovered to pre-Covid levels.
Why Airlines Can’t Serve the Long Tail
The reason for this is that demand is too fragmented to work in the airline business model, where they predict, plan, fly, and then wait the volumes to materialize. If not, they quickly cut the route. Airlines need large volumes to even consider testing a route. Reason for this is that airlines tend to have over 100 seats as the low end of their aircraft portfolio and these aircraft need to fly multiple routes a day to make a profit. This makes it impossible to make the model work for regional city routes that serve only 160 passengers per month.
A Hidden Market in Regional Cities
On their own, these small routes don’t add up. But when you step back, you see that these breadcrumbs of cities scattered across the map, actually form a massive hidden market: employing hundreds of millions of people and generating trillions in revenue.
“The question is: how do we capture this huge market, the Long Tail of aviation?”
With today’s technology and innovative business models, we are able to capture these breadcrumb cities with demand and start a revolution in regional air travel. If we look at a single city pair level, this will never work, but by combining multiple cities we are able to connect the long tail: turning these breadcrumb cities into connected corridors, we can dynamically match demand and create profitable multi-city routes.
More Than Aviation — It’s About Time
Solving this isn’t just about aviation. It’s about wellbeing for travelers, productivity for companies, and vitality for entire regions.
At the core, it’s about time: giving people and companies back the hours they lose today in inefficient travel.
LYGG. It’s about time
Roope Kekäläinen
Founder at LYGG
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