Internet Travel Monitor - Marketing, Research & Tech
January 25, 2017
Eye Scans are Replacing Airline Boarding Passes
Security tech firm Clear makes a big leap toward a national network—but there are still obstacles to overcome
Clear, the biometric screening firm long hobbled by a limited network, is landing in several major U.S. airports soon—including New York’s LaGuardia—marking the start of an era that could radically accelerate your trip from curb to cabin. But there are some bumps to smooth out first.
Clear, which started at JFK International Airport earlier this month, will open screening lanes at LaGuardia and Atlanta’s Hartsfield-Jackson in the next few days, followed by Los Angeles International and Minneapolis-St. Paul by April. All told, the expansion will put Clear at 22 major airports, covering the majority of domestic American flights, according to the company.
The new option doesn’t replace TSA PreCheck so much as complement it. It checks travelers’ identities with a fingerprint or iris scan, eliminating the boarding pass and identity checks. That lets Clear members proceed directly to bag and body screening. The company says about 65 percent of its users at the busiest airports have also enrolled in PreCheck, allowing them to retain their shoes, belts, and laptops during the screening.
Clear is a reincarnation of the verified-identification idea begun by journalist Steven Brill in 2003. That company ran out of money and shut down in 2009. It was purchased in bankruptcy the following year for about $6 million by investors including Clear’s current CEO, former hedge fund manager Caryn Seidman-Becker. Other stakeholders include T. Rowe Price Group Inc., Sterling Equities, investor Bill Miller, and former executives of Priceline Group Inc. (Clear also offers security checks at various professional sports arenas.)
The New York-based company, in which Delta Air Lines Inc. holds a 5 percent stake, has been working hard to expand its network to the point where veteran air travelers would view it as comprehensive. Glaring omissions at some major hubs, such as Chicago O’Hare and Newark Liberty, have made some frequent fliers disinclined to consider paying for the service. “In order to provide the best service and to meet the expectations of our members, we have to be in all the right airports,” said David Cohen, Clear’s chief administrative officer. “That’s really important.”
There are other obstacles still facing Clear. Its lanes, for one, aren’t always located in the same terminals that have the bulk of an airport’s traffic. At both Dallas-Fort Worth and Houston-Bush airports, for example, Clear’s lanes are in terminals not used by the dominant carriers at those hubs, American Airlines Group Inc. and United Continental Holdings Inc., respectively. Cohen said each airport has different needs and requirements about where Clear can establish screening.
Clear charges $179 annually, with new enrollees receiving a one-month trial for free. The company has also experimented with a variety of pricing promotions, such as $29 for a three-month enrollment last summer. Members of Delta’s SkyMiles frequent flier program get discounted memberships, while Delta’s top-level elite members receive Clear for free. Clear members can add a spouse or domestic partner for $50, and children 17 and younger are free.
The company says it has more than 700,000 members nationwide and will surpass 1 million in the next few months, with annual enrollment growth of 110 percent.
If Clear reaches critical mass and becomes a viable option for all who wish to enroll, it may face a bigger problem: success. More travelers using Clear may spell longer queues at airports that already face space constraints. Isn’t Clear useful to its customers precisely because its audience is limited? Cohen said the company hasn’t yet faced this problem, even as it processes upwards of 2,000 travelers each day at its busiest locations. And the tech firm has an advantage when it comes to that issue, he said: By using technology like automated kiosks, it can expand without hiring more employees.
Copyright 2017 Bloomberg L.P. All rights reserved. From http://www.bloomberg.com. By Justin Bachman.
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