Air France-KLM low cost carrier Transavia has recently launched a new option for customers to resell their airline tickets. I find this to be quite interesting, and wonder if we could see this on a more widespread basis (thanks to Aaron for flagging this).
In this post:
Transavia will resell your airline ticket… maybe
While many full service airlines no longer have change fees on tickets, low cost airlines generally do. So if you book a fairly cheap ticket and can no longer use it, there’s not much of an incentive to even bother letting the airline know, since it’s not like you’re getting anything back.
That’s where Transavia’s new concept comes into play, which is in partnership with Fairlyne. If you have a Transavia flight booked that you can no longer take, the airline will now let you resell your ticket, and if someone buys it, you receive compensation.
How does this work?
- You first need to check if your booking is eligible
- You’re then told how much compensation you can receive, and can put your ticket up for sale
- If the ticket is successfully resold, you’ll be notified of your compensation by email, and you’ll be compensated via your original form of payment
The resale of tickets isn’t guaranteed, unless the “Guaranteed Sale” status is displayed during the resale request process. That means the flight is in high demand, and the resale will be immediate. In most situations, it’ll instead show as “Pending Resale,” where it’ll only be successful if someone else buys a ticket. You only receive compensation if your ticket is sold, and your ticket also remains valid until/if it’s sold.
Transavia highlights the benefits of this for customers. You can receive compensation, you can let someone else travel, and you can resell your ticket safely.
How do the economics of this actually work?
When I first read about this concept, I was a bit confused. Why would an airline sell a customer’s ticket, when they’re potentially cannibalizing their own ticket sales? So I looked a bit more into Fairlyne, the company behind this, including watching the below “pitch” about the concept.
The idea is that this is specifically for situations where flights are sold out, so the airline no longer has any inventory to sell. Ordinarily you can’t transfer your ticket to someone else, but of course an exception applies if the company does it directly.
As far as compensation goes, airlines can decide how much they want to offer. Fairlyne gives the example of someone booking a $60 flight way in advance, the flight eventually being sold out, and then the airline reselling that ticket for $120, while giving the passenger $30 in compensation (50% of the initial ticket cost).
It says Fairlyne charges airlines a small fixed fee for the platform, and takes a 20-25% cut on the incremental revenue, for providing this white label service.
This concept seems logical enough, though the issue is that the actual use cases seem rather niche, in my opinion:
- This is only useful for airlines that offer no ticket flexibility, so that limits this primarily to low cost carriers
- This assumes the flight is fully sold out, and that there’s demand for someone else to buy that ticket, and enough time for all of this to be coordinated
- Airlines ultimately have other options for these kinds of situations, to maximize revenue; they can also contact existing customers and offer them a small voucher if they’re willing to take a less full flight, etc.
So it’s a creative concept, no doubt, but I’m not convinced it’ll catch on that much, given the constraints.
Bottom line
Transavia is partnering with Fairlyne to allow passengers to resell their airline tickets, when they decide they can no longer travel. This of course sounds great, though this is very niche, as it assumes that a flight is sold out, and that someone else wants a ticket on that flight. I’m curious to see if a lot more airlines use this system, or if it doesn’t catch on.
What do you make of this airline ticket resale concept?
Back in the day, universities would ban ticket reselling for sporting events. In the modern era, those who sell out every game never have to worry that resales will cannibalize potential sales. So, now you can offer to resell your tickets to a football game at whatever price you want, with the university and ticket platform sharing in the proceeds. Sold out flights make oodles of sense for this technology. And, if you remember you...
Back in the day, universities would ban ticket reselling for sporting events. In the modern era, those who sell out every game never have to worry that resales will cannibalize potential sales. So, now you can offer to resell your tickets to a football game at whatever price you want, with the university and ticket platform sharing in the proceeds. Sold out flights make oodles of sense for this technology. And, if you remember you basic economics courses, this generates economic surplus by definition.
This reminds me of those people who bought a hotel room. The hotel rents their rooms out first, so the reality of your room being rented out is low. This is the same thing. The airline will focus on their tickets first and then sell others. I would also not be suprised if they take a cut on reselling your ticket.
Can someone please contribute a vampire joke?
I'm too jet lagged. But I read that as "Transylvania's Airline..." and now I'd like a Count Dracula or vampire joke of some kind