Bid your Way to a Better Seat

I was fortunate enough to fly to New York City this week, but I found myself disappointed that nothing has changed in the past few months. Airlines are desperate for profits, yet everything seemed the same or worse from a passenger perspective. We all deserve a better travel experience, so in the next couple of articles I’ll be covering a couple of areas of potential profits that the airlines could capture while improving the customer experience, starting with:

1. Airlines should auction off available first class upgrades

Some airlines reward frequent fliers with “stickers” that they can attempt to use to upgrade themselves on future flights. Each sticker can be used to upgrade 500 miles of travel. I have been trying to upgrade myself for years now on American Airlines and still have 17 stickers in my account (I think I was successful once in the last 24 months). I would imagine that these stickers sit there on the balance sheet as a liability until they are redeemed (I know this is true for miles) and so airlines should be trying to help people spend these. This liability is the reason that miles expire and why American Airlines recently shortened the expiration of miles to 18 months (reset upon each account activity).

In general, frequent fliers use stickers to request upgrades and the person with the highest status wins, followed probably by first come first serve within a status level. Coupled with this is an incorrect assumption that people wouldn’t redeem more points or miles for an available upgrade seat if they knew it would help them secure it. Here is what I propose:

A cross-country flight on American Airlines requires 5 or 6 stickers to get upgraded. I propose they implement an auction system and make the minimum bid these same 5 or 6 stickers while at the same time allowing someone to set an unlimited maximum sticker and mileage bid. That way the customer with the stronger desire wins the seat over a less-motivated peer, while the airline wins by reducing their outstanding sticker and mileage liabilities. At the same time it would add a dimension of drama to help everyone involved pass the time before the flight. People could even be allowed to boost their bid by text message if they get outbid.

What do you think?