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Auctions are nothing new; traditionally one has always associated them with high value paintings or works of art. More recently, auctions have come to the fore when harnessed with technology and the internet and creating a whole new industry where one can bid or auction absolutely anything, though one has yet to see a mother in law appear as a selected item.. Thus it’s hardly likely that the travel industry would be omitted from the whole auction concept and the signs are that we may be at the beginning of an auction craze.
Hotel rooms for auction i.e. when hotel rooms are empty and hotels want to have a fire sale have been common place for a while, even though this particular mode of sale seems to be frowned upon by most hotel managers. Airlines though have hardly started with the concept; though this is about to change.
The starting point is the concept where an airline auctions off upgrades from say economy to business class. The airline will, for example, put out the auction say seven days before a flight if it feels seats will be left empty; the notion being that getting incremental revenue gained from people willing to pay X extra to upgrade themselves is revenue they would otherwise not have had. There is however a flip side: if a business passenger has paid say 800 Euro for a seat, how does he feel if they person next to him has paid 300 Euro for an economy class seat and 100 Euro extra in an auction to upgrade? Might it be then that next time the business passenger will decide not to pay the full amount and instead offer a slightly reduced amount via the auction process and thus diluting the total revenue the airline in fact collects? This is not to mention the ill will that premium passengers will feel when the front of the cabin becomes congested and fails to give what the premium payers are paying for in the first place i.e. privacy, space and comfort.
The fact that such auctions are now gathering momentum indicates either that airlines are getting desperate for new ideas or that they have done their homework and know exactly what they are doing. Somehow though, we doubt it.