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Airlines testing auctions for seat upgrades at the gates

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XiaNaphryz

LATIN, MATRIPEDICABUS, DO YOU SPEAK IT
http://www.wsj.com/articles/going-once-going-twice-airlines-auction-seat-upgrades-1452105322

OeZz2Sa.jpg


Going Once, Going Twice: Airlines Auction Seat Upgrades

By Scott McCartney
Jan. 6, 2016 1:35 p.m. ET

Airlines are sold on using auctions to peddle more premium seats rather than giving them away free to loyal customers.

More than 30 airlines around the world offer auctions to sell upgrades to first-class, business-class or premium-economy seats. More will be launching auctions in 2016. Some even auction off the chance to have an empty seat beside you in coach. It is an opportunity for travelers who don’t have superelite status to enjoy the perks without paying full price.

“Any opportunity to upgrade a long-haul flight for significantly less than buying into the business-class cabin is good,” says Michael Trager, a New Jersey native living in Amsterdam who has been the high bidder in several KLM Royal Dutch Airlines upgrade auctions.

His strategy is to bid no more than $322 to $430 (€300 to €400) each way in auctions. If he wins, his business-class round-trip fare would be about $1,600 (€1,500)—less than half the cost of buying a business-class seat outright. He has been in at least six KLM auctions in the past year and has been the winning bidder three times.

Airlines rarely offer free upgrades on long-haul international flights; even elite-level frequent fliers have to pay for business-class upgrades with miles, cash or both. But auctions are migrating into domestic U.S. flights, where airlines have been trying to wean travelers off frequent free upgrades.

Delta Air Lines, for example, says that as a result of offering discounted first-class fares and paid upgrades for fees, 57% of its first-class seats have customers who paid their way in rather than free upgrades, up from 11% a few years ago. And Delta wants to push that to 70% in the next two years, Delta executives told investors in December.

In addition, airline mergers have consolidated the armies of travelers with elite status, so even top-tier fliers are competing with many others for a couple of empty first-class seats each flight.

Customers in the lower tiers of elite status see themselves at the bottom of very long upgrade lists flight after flight. SeatBoost, which launched an upgrade auction app that Virgin America began using in September, thinks those frequent fliers may be prime candidates for auctions.

“We give fliers some control rather than being 39th on the list,” says SeatBoost founder and chief executive Kevin Stamler.

American Airlines says it experimented with an auction system and got good feedback from customers, but set it aside during its computer-system integration in the US Airways merger. “It is something we would like to revisit for further assessment,” a spokesman says. United Airlines and Delta say they are both watching the auction phenomenon closely.

Virgin America says it began testing SeatBoost auctions at the gate an hour before boarding on Las Vegas flights. Bidding starts at $10, $30 or $50, depending on the length of the flight and whether passengers are bidding on extra-legroom seats in coach or a first-class seat.

Passengers who bid see where they stand on a leaderboard, and just before boarding begins, the airline awards one upgrade to Main Cabin Select and one to first. The auction, with people bidding against each other in the gate area, can add some excitement—and some potential added frustration—to the boredom of waiting for a flight.

Virgin America says its top-level elite passengers get upgrades to Main Cabin Select seats before the auction, and it still sells upgrades through its airport kiosks and its gate agents. The Las Vegas auctions are a test, and the airline says it is too early to tell if it will expand. The carrier won’t disclose average winning bids, but says the auctions have gotten competitive. “It does drive last-minute purchase behavior,” says Virgin America spokeswoman Abby Lunardini.

Virgin America also uses a system from a company called Plusgrade that launches auctions days before departure. The airline started picking flights for auctions based on bookings last spring, and invites some passengers to bid. Ms. Lunardini says the Plusgrade auctions have been very successful, but Virgin America won’t disclose details on successful bids or revenue generated.
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V

Volimar

Member
"We need to come up with new exciting ways to piss people off before confining them in metal tubes for hours on end."
 
T

thelatestmodel

Junior, please.
You wonder how some ideas even make it past their initial airing at meetings. Everything about this is terrible.

Can we just have Hyperloop now please?
 
W

Wellington

BAAAALLLINNN'
As the article mentioned, many airlines already use a system like this. Personally I think it's a good move for reasons also mentioned in the article.

“Any opportunity to upgrade a long-haul flight for significantly less than buying into the business-class cabin is good,” says Michael Trager, a New Jersey native living in Amsterdam who has been the high bidder in several KLM Royal Dutch Airlines upgrade auctions.

His strategy is to bid no more than $322 to $430 (€300 to €400) each way in auctions. If he wins, his business-class round-trip fare would be about $1,600 (€1,500)—less than half the cost of buying a business-class seat outright. He has been in at least six KLM auctions in the past year and has been the winning bidder three times.
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Either way, if I can secure an upgrade for a 3+ hr flight that I didn't get a comp upgrade on, I'd do it in a heartbeat. Problem is that now airlines won't give out those comps to try and squeeze out money.
 
S

Shizza

Member
Waiting for your plane at the gate just got a whole lot more exciting. I welcome the entertainment, but only if they make a spectacle of it.
 
A

Acorn

Member
Shizza said:
Waiting for your plane at the gate just got a whole lot more exciting. I welcome the entertainment, but only if they make a spectacle of it.
Click to expand...
Hope they hire those "blahblahblahblahigot150150150goingoncetwice. Sold!"rapid speaking people.
 
S

Savitar

Member
I'll give them a bag of peanuts for a upgrade.

But I want the peanuts back when I take my seat. I'll be hungry later in the flight.
 
V

Vhalyar

Member
It seems like a pretty alright deal?

The bidding happens before, and ends at boarding time. They are also only selling single upgrades, so no families getting collectively prissy.

I would absolutely pitch in on certain flights, though since I can't justify the normal "what you get"/"what you pay" equation for business & first class I'd most likely never win.
 
M

Mr. Giggles

Member
I actually think this is ok.

I mean, airlines are dicks with upgrades already. Might as well let me buy my way in if its still cheaper
 
D

daveo42

Banned
If it saves costs for passengers wanting business class seating, then I'm sure this will be fine and maybe even drive the cost of business class and luxury seating down. Regardless, I'm fine with being a flying sardine.
 
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