Air Canada Launches Seat Upgrade Auctions

by Richard D’Ambrosio

Air Canada has unveiled an auction-style program where travelers can bid online to upgrade their seats to premium economy or business class on select flights.

Customers who book their ticket direct via the Air Canada website, Air Canada mobile website or a call center will receive an email 10 days before takeoff, inviting them to make an offer on Premium Economy Class, North America and Caribbean Premium Rouge and International Premium seats.

Air Canada said that tickets issued by travel agents are available for the program as well.

Bids are made on Air Canada’s website, using a sliding minimum/maximum scale that Air Canada calls its “strength meter.” When travelers choose a bid price, they are informed about how it ranks against other passengers booked on that flight.

To encourage regular check-ins, Air Canada also allows passengers to insert flight numbers on Air Canada's website to get updates on their bids. Travelers find out if they won approximately 48 hours before departure.

Air Canada joins a group of airlines offering upgrade auctions, including Air China, Lufthansa, Swiss Air Lines and Qantas Airways. Analysts believe this concept could become more widespread as airlines determine if it helps them increase revenues and profits by encouraging upselling directly with consumers who value the added amenities and space.

It’s uncertain so far what this will mean for travel agents, as consumers are only now testing the program and developing an opinion about it. Agents will need to track their clients’ bidding habits to see if their preferences are being met. Conversely, travel agents might need to assuage injured feelings when a client doesn’t get an upgrade, or listen to complaints if a traveler they booked in a higher fare class paid more than a seatmate who discloses that they won an auction at a lower price.

But the first reactions on Facebook this morning were all positive.

"This is an interesting selling technique. But while those travelers who participate in the auction may win the bid and secure an upgrade at a discount, it is a gamble not a guarantee," said Arleta G. Cosby at Cosby Travel Consultants. "I always recommend that our clients purchase the class of service that best meets their travel style and budget. This way they get the travel experience they desire from the onset."

"I think it's a great idea," said Becky Millard Lukovic, owner of Bella Travel Planning. "I would love for some of my clients to experience the joys of an upgraded cabin when they normally would not purchase one. The more they experience elevated service, the more they want it. To me, it's the same as people upgrading with points. Better air service means my clients arrive to their destination in a better place."

"I love the fact that my clients will get a chance to experience something they may get hooked on for their future travel plans," agreed Lorraine Simpson, owner of The Romance Concierge. "I love business-class travel and when flying long distances; I feel it's almost essential if you can afford it. The passenger may not want to pay for the upgrade on booking but see the option on the day and decide to bid for a chance."

Air Canada intends to implement the program across its entire network this summer, but the carrier maintains that only a small percentage of premium seats will be available at auction. Tickets that have not yet been issued, group bookings, bookings that include an infant under age two, tickets issued by an airline other than Air Canada, and flights operated by Air Canada Vacations are not eligible for the auction bidding program.

--Additional reporting by Cheryl Rosen

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