Air Europa arguably* made history earlier this year, selling the first plane ticket as an NFT. That was something of a one-off situation, but the company did not give up on the concept. It plans to launch an NFTicket platform, selling regular flight bookings as NFTs, in addition to its normal reservations process.
While the concept may sound revolutionary, the fine print suggests it is more of an incremental play. Perhaps the most intriguing part is that the carrier is keen to have third parties play a bigger role in deciding fares, rather than the in-house revenue management team.
How the NFTicket will work
In Air Europa’s NFTicket plan consumers will have the option to complete a booking using the NFT path on the same screen as traditional ticketing. Passengers who choose the NFTicket option gains a key additional option at this point.
The holder of an NFTicket can change the name on the booking as often as they want, up until 72 hours prior to departure. At that cutoff, whichever name is on the booking is locked in for travel. Also, the airline will take a cut each time the name is changed (i.e. transfer of the NFT). That incremental revenue is a key factor in Air Europa’s pursuit of this offering.
Is the NFTicket really different?
But, at its core, allowing name changes on bookings is not a revolutionary concept. Not every airline supports it, and that decision is driven somewhat by technology. But Ryanair and easyJet are two that have it built in to their pricing model. And they are happy to charge for the service, just like the NFTicket builds in to the smart contract.
Those transactions do not occur on the blockchain, with the attendant costs. But just enabling name changes is not an especially unique use case. For now, however, it seems to be the main selling point for the airline.
airBaltic CEO Martin Gauss is also a strong proponent of NFT-based tickets. He sees the blockchain as reducing transaction costs and simplifying myriad operating procedures within the airline. So far that effort is focused on the loyalty program, not ticketing. Gauss has not suggested a timeline that would see his airline bring tickets on to the Blockchain. Moreover he acknowledges a future blockchain “is probably not yet developed today” to support a full-blown deployment.
Shifting revenue management responsibilities
Building out a new ticket management and distribution process just to support one-off name changes would seem to be a lot of effort to invest for limited potential return. When discussing the NFTicket concept at Future Travel Experience Global in Las Vegas earlier this year, Carlos Conde, Air Europa’s Commercial Manager, Panama, Central America and Mexico, acknowledged another potential segment this would allow the company to support: Resellers.
The discussion centered on the idea of a future event, such as a concert or sports competition, where demand would be higher than normal. A motivated and well-funded player could choose to purchase a block of NFTickets in advance, then work to resell them to passengers. There is risk to those resellers, of course. But Air Europa is happy to let them assume those challenges.
Moreover, Conde dismissed the idea that the airline would benefit more from pricing the flights better using its own revenue management team, rather than depending on speculators. He implied that the lower revenue secured in volume and in advance would be more useful to the operations than grabbing the higher revenue from the actual travelers.
Presumably the airline also will not sell all its seats way in advance at the lowest fares. But details on the implementation are not yet finalized.
Like many Web3 things trying to break into the travel world, it is unclear where the utility of blockchain sits or what is new, rather than shoehorning existing concepts into a new technical framework. But it is clear that airlines are still hunting for blockchain use cases. And a few are finally going live with those experiments.
*The NFT was not transferrable and was more of a publicity stunt than a blockchain transaction. But I suppose it still has to count given that there was an NFT issued as part of the deal.
More news from Future Travel Experience Global 2022
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- Allegiant plans more Extra on 737 MAX fleet
- JSX details Starlink aircraft activation plans
- Is Allegiant ready to add inflight WiFi?
- Alaska Airlines going digital to slash bag check-in time
- Allegiant flips its digital marketing focus
- Seeking a connected aircraft timeline
- Air Europa adding NFTicket platform
- Could Allegiant deliver an interline win?
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