Airline Experiments with Onboard Bidding for Better Seats

Sometimes, it doesn’t quite hit you until after you’ve stowed your carry-on and buckled up: you’re in one heckuva lousy seat – and there’s nothing much you can do about it. That could be changing, though, if a company called GuestLogix – and some airlines – have their way.

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Auction for Upgrades on the Plane

The firm, which describes itself as a “provider of onboard store technology and merchandising solutions,” says one of its airline clients has been experimenting with onboard auctions in which already-seated passengers who want to improve their cabin positions can bid on better seats.

GuestLogix executive Brett Proud told FareCompare via email that the airline (which he prefers not to name for now, though news reports call it a Canadian carrier) has “performed several successful test weeks on specific long-haul routes.” According to the executive, “The key has been to find a way to capitalize on the in-the-moment purchase when a passenger finds their seat and realizes that the legroom is not sufficient or they are seated next to a small child that may prevent them from a good sleep or business activity.”

Testing of the auction concept has also been carried out by a couple of Chinese airlines and Proud says some Chinese carriers believe they can auction seats on long-haul flights for as much as $2,500.

Big Squeeze: Cramped Seats and Large, Tall Flyers

Bidding – New Revenue Stream for Airlines

That of course is what it’s all about – money. Although bag fees rake in staggering amounts – U.S. airlines combined earn billions a year from them – the baggage revenue stream appears to be leveling off. On to the next money-making idea and Proud says a seat auction makes perfect sense: “If seats are empty and passengers are willing to pay for upgrades, airlines should be selling those seats whenever they can.” He added, “This is pure profit to the airline.”

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Upgrade Experiments, Bumping Auctions

Proud noted that United Arab Emirates’ Etihad Airways has also been offering cabin upgrades via auction, but this actually takes place by email two days before a flight, rather than just before take-off or in-flight.

About a year and a half ago, FareCompare reported on a different kind of auction in which Delta passengers bid on the lowest compensation they’d accept to be voluntarily bumped from a plane. Since then, new Deparment of Transportation rules have gone into effect that give involuntary bumped passengers as much as $1,300 for their trouble.

Future Auctions – Up in the Air

Could other airlines start auction off seats? GuestLogix says it’s “very likely.” In fact, anything’s possible when the prospect of new fees or any new form of revenue is on the seatback tray table.

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Published: June 13, 2012