It’s Not Such a ‘Clear-Cut’ Deal Anymore

UPDATE 6/23/09: Looks like Clear members will have to rejoin the ranks of those waiting in line at airport security. The company shut down last night after its parent company, Verified Identity Pass, Inc. was unable to negotiate an agreement with its senior creditor to continue operations. At the present time, refunds will not be issued. For more info visit flyclear.com.

Recently, the Clear registered traveler program announced a doubling of their annual rates. For frequent travelers like me, this program has been a life-saver, enabling us to avoid the uncertainty that comes with long security lines. It means that I can go back to “just-in-time” traveling, arriving with no checked bags just 30 minutes before my flight departs, since I know I can quickly go to the front of the security line and on to my gate. When I’m flying out of San Francisco, I know that I can leave my house less than an hour before the flight departs. The cost of $99 for a year easily paid for itself in terms of time saved: at just one flight per month, my time savings averages out to perhaps 4 hours per year of waiting in line avoided, assuming 20 minutes is the average wait time. I think most experienced business travelers would value their time at more than $25/hour ($100/4 hours).

To date, the lack of airport coverage has been my biggest gripe — missing airports include O’Hare, LAX, Dallas, Houston, Miami, Seattle, BWI, Phoenix, Minneapolis, New Orleans, and Las Vegas, among others (LAX is apparently coming soon). Plus, only select terminals are available at JFK, LaGuardia, and Boston Logan. Despite the initially spotty coverage, I trusted that new airports (and sports venues like football stadiums) would continue to be rolled out.

Recently however, the Clear program announced a doubling of their annual rate. Using the simple calculation above, the cost of my time saving quickly rises to $50/hour. This also comes at a time when travel is being cut back as the economy shrinks, which will likely reduce wait times at busy airports as crowds thin somewhat. If we reduce the average time saving from 20 to 15 minutes per trip, a once-per-month traveler now is paying $57/hour for his or her time savings. That’s a fair bit of money to avoid waiting in line, especially now that most of us can read and respond to emails on our BlackBerrys while we wait.

Of course, if you’re a 3 times/month traveler, you’re savings value is quite a bit higher, and this is clearly the sweet spot for the Clear program — the frequent business traveler. Moreover, the value calculation will obviously be partially driven by the program’s coverage in airports relevant to a given person. For example, if I lived in Seattle, I would be unlikely to participate, since my home airport wouldn’t be covered. Perhaps if the Clear program could do a better job at rolling out the services geographically, they would appeal to a wider audience and thus be able to spread their fixed administrative costs over a broader customer base, and ultimately reduce the price, further expanding their customer universe.