Live auctions have been around for a while, but this is the first time a major airline is testing the waters, and leaving the chance to upgrade so late. It won’t appeal to larger corporations, but the blended travel market could make a perfect fit.
With fewer business travelers in the skies, Lufthansa is now allowing passengers to bid for an upgraded seat during a live auction.
The German airline is testing its “Bidboost” initiative on international flights to begin with, between Newark, JFK and Miami airports in the U.S. to Munch and Frankfurt in Germany.
It works by the passenger telling Lufthansa what he or she is willing to pay, right up until boarding begins. It differs from similar schemes like Plusgrade which offers bids during the reservation window until three days before departure.
It has tapped startup SeatBoost to power the auctions, which claims airlines can’t lose because the bidding process closes just before the departure. The argument is that any sales are extra ancillary revenue compared to letting the plane take off with the seat empty.
“Our pricing often starts at 50 percent of the airline’s upgrade rate. It’s really aggressively priced, because it’s going to go for zero,” said CEO Kevin Stamler.
It’s the first major airline deal for SeatBoost since it began with TAP Air Portugal. A partnership struck in December 2019 generated $1.5 million in its first 90 days, the company said, before the pandemic struck. Prior to that it worked with Virgin America in 2016.
The startup also works with Avianca, with another “European leisure carrier” to be announced in the coming weeks. It aims to announce five more partner airlines before the end of the year.
Although corporate travel agencies have approached SeatBoost, it said was currently more popular among leisure travelers.
“A lot of business travelers want their guaranteed seat, they don’t want to leave it to chance,” said Stamler. “They want something that’s set in stone.”
However, he said blended trips will play a role in the future.
More routes are planned with Lufthansa in the spring, while it may also develop a function to allow passengers to bid with loyalty points.
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