What if a plane flight were networked and became a social experience with its own economy?

For part of a book I’m finally starting to work on, I’ve been thinking about how companies and industries can be remade with Googlethink and social smarts (note how I’m not saying Web 2.0). It’s harder to reimagine some than others. The benefits of tearing apart and rebuilding cable companies are obvious. But I just about gave up on airlines, dooming them to their status as the new buses. What can one do with such a commodity service, and one that has deteriorated so badly?

Then I was inspired by Steve Baker at Business Week, who asked, “Why hasn’t aviation benefited more from Moore’s Law?” Maybe it’s not Moore’s law that can reform airlines but Jarvis’ First Law — give the people control and we will use it; don’t and you will lose us — and Zuckerberg’s commandment — give your people elegant organization — plus a bit of Googlethink about networks, platforms, and wise crowds. For Burda’s upcoming DLD event, one airline, Lufthansa, is asking what they should be in 15 years. Here’s one scenario of how they can change in far less time….

Start here: Most passengers on airlines today are connected to the internet on the ground and soon we will be in the air as airlines return to the idea of adding wireless internet to jets (see an AP roundup from yesterday here — I can’t wait). Getting us connected will be good for the airlines, not only because they have something new to sell — if they don’t try to gouge us — but also because we’ll be busy — engaged, entertained, connected — and less likely to grumble and revolt at delays. Busy passengers are happier passengers.

Once airplanes’ passengers are connected with the ground, that enables them to get connected with each other. It would be easy for the airlines — or, failing that, the passengers themselves — to set up social networks around flights and destinations. The possibilities are endless:

* At the simplest level, we could connect while in the air to set up shared cab rides once we land, saving passengers a fortune.

* We can ask our fellow passengers who live in or frequently visit a destination for their recommendations for restaurants, things to do, ways to get around.

* We can play games.

Note that this requires not only wifi internet access at a reasonable price but also electric plugs at every seat. The first airline to do this will gain the loyalty and appreciation of a huge number of wired road warriors.

* Now think back to the earliest 747s with their lounges where you could socialize with fellow passengers, something that still goes on even in the cramped quarters of today’s jets, though every inch is filled with a seat and though the cabin crew is less often the object of the flirting. The idea is coming back on Virgin and in the 787 Dreamliner and A380. So now imagine if on this onboard social network, you could find people you want to meet — people in the same business going to the same conference, people of similar interests, future husbands and wives — and you can rendezvous in the lounge.

* This is the key to decommodifying the airline: What if you chose to fly on one airline vs. another because you knew and liked the people better? What if the airline’s brand became its passengers? What if the airline even found ways to encourage more interesting people to fly with them because they knew that would attract and retain passengers (they could offer discounts and benefits to people who are active and popular in the social network)? Right now, all you offer is seats and miles: commodities. How much richer this would be if you offered small societies. Yes, we could still get stuck next to a talkative bozo — but not if we could meet people and arrange our seats before the flight thanks to the social network. Next to the right person, I might even tolerate a middle seat.

So these social networks should be opened before the flight. And that enables not only these on-flight connections but also a new economy:

* The airline can set up an auction marketplace for at least some of the seats: What’s it worth for you to fly to Berlin next Wednesday? You could bid and buy a seat from a passenger who already holds one. This could solve some of the airlines’ overbooking problem and reduce the cost of bumping customers if late-booking passengers can buy seats from fellow passengers in an open marketplace. You can bet that once a social network around a flight exists, we’ll compare what we paid. So why not be open? Yes, speculators could arbitrage seats, but so long as they’re nonrefundable, what problem is that for the airline? They become market makers. Besides, this sets a new market value for seats that in some cases will be higher than the airlines’ existing fares.

* The airline could also use this to predict and maximize load. What if there’s a sudden surge in demand for a destination the airline can see because bids appear in an auction marketplace for a certain route around certain dates (because of a new conference or festival or good media coverage for a new getaway or bargain)? The airline can add capacity, which keeps the airlines in control over arbitrageurs; the airline is always in control of supply and now it would know more about demand. Similarly, what if a flight is light and the airline starts offering passengers alternatives at great discounts to enable the airline to cancel a flight and reroute the equipment long before departure? The airline increases efficiency and profitability; the passengers get a dividend; and the environment gets a break. These things can be done in an open and flexible marketplace.

* While you’re at it, why not turn frequent-flier miles into an open market? In miles, the airlines have created a virtual currency with far greater reach and value than those on Second Life or Facebook. But they’re essentially illiquid. The airlines make it impossible to get frequent-flier seats with them unless you’re flying to Krakow on Christmas Day a decade hence. And the other deals they offer us — use your miles to buy a TV — are bad deals. This, in turn, devalues the virtual currency to the point that it offers an ever-decreasing incentive to choose one airline over another; it no longer acts as the decommodifier the airlines intended. So open it up: Let us bid on frequent flier seats with our miles. Let us trade and barter our miles with each other — I’ll sell you this iPod for miles I want to use to get my vacation. This will again add value to the currency.

* The main reason we go for miles today is to get silver or greater status so we can jump lines and board first. But I’m not in control of how much I travel; my employers are. So what you really want is my loyalty; you want a large marketshare of me. So let me earn privileges in other ways. Open this up, too. Let me bid miles or money for these benefits: create a market value for boarding first.

* The airline should find ways to involve employees in the network. They can also offer tips. They are the airline’s representatives to the community. And the airline should want to learn more about its employees through the network. Those who make the flight more pleasant and more social are an asset and should be rewarded. Besides, it’s hard to get nasty with cabin crews when you feel as if you know them.

* The airlines can also learn a great deal about their service from the network of passengers. We’ll tell you about the food and what’s worth paying for. I’ll start a movement to save my knees from the bozos who slam their seats into them. You’ll see which employees are your best marketers.

There are many subtleties to this. For example, in some cases, I won’t want to reveal my true identity (telling people I’m out of town), for others I will (doing business). If seats are being traded, real identities and credit cards must be in the system for security. And so on. But this would be easy to pull off with existing social software (Ning, Drupal) and links to existing social networks (Facebook, Linkedin) and existing auction markets (a walled-in eBay). The beauty is that no marketing is required; you’re simply serving, connecting, and organizing the customers you already have. Yet this act alone rebrands you as the social airline. (Better get there quick, before Virgin does.)

So brainstorm with employees and passengers. Imagine what it takes to be the open, social airline — a platform for travel — and then imagine the good that comes of it. Your customers will give you value if you trust them and let them.

: LATER: Ross twitters: “the social airline already exists, try the last flight to Vegas on a Friday night.”