Another way of unbundling has reached my attention. Using the services of Optiontown, I got an upgrade last week, with Air Asia at nominal cost. The way it worked was this:
- I completed my online booking with Air Asia
- I then navigated to Optiontown and retrieved my airline booking
- Chose the upgrade option I wanted
- Paid a small non refundable fee to apply for the upgrade. Fees can be paid by Credit Card or Paypal
- Paid a second fee equivalent to 50% of the usual upgrade price. This fee is refunded five days after the flight if upgrade does not come through
- Waited for confirmation of my upgrade which appeared four hours before travel. This confirmation can come as early as four days before.
- Got on board and enjoyed a nicer seat for less than Air Asia’s advertised price
Twelve airlines are currently using Option town (see below) to sell excess upgrade capacity to passengers. Depending on airline and sector, Optiontown offers eight opportunities for some sort of an upgrade, after a customer has bought their ticket:
- Empty Seat Option (EeSo) – travellers can buy one or two Empty Seats next to their seat for the entire duration of the flight, for a non refundable $1 fee plus a nominal seat price
- Flexibility Reward Option (FRo) – if a traveller has a flexibility and can travel at a different time on the same day, Optiontown may move them to a different flight and pay the passenger a bonus. This allows airlines to more effectively manage capacity
- Lounge Access Option (LAo)- discounted lounge access
- Multiple Booking Option (MBo) -allows passengers to hold confirmed availability on multiple flight(s) simultaneously and up to one day before departure, choose the flight they want to fly on
- Preferred Flight Option (PFo) -allows a passenger to try and get themselves moved to a flight they really want at a much cheaper price.
- Preferred Seat Option (PSo) -access to Exit row, extra legroom or bulkhead seating at a discounted rate
- Upgrade Travel Option (UTo,) – upgrades to Business and First Class at lower cost
- Xtra Baggage Option (XBo) – reduced price luggage
The thing to understand about Optiontown’s service is that it is a gamble. You may not get the upgrade you want and lose the (admittedly very low) application fee you have forked out. They do seem to promptly return the payment made for the actual service. If you, as a passenger do snag their desired upgrade, then you get a bonus deal for a lower price. I am curious how many passengers who do not get their upgrade are disappointed and how many are accepting of the situation? Also, when I first booked my Air Asia fare, I turned down the Optiontown upgrade initially. On researching it a few days later, I found that the price of the upgrade had fallen. I presume the risk I would not get the option increased.
There is a Tripadvisor Forum dedicated to this subject. Many consumers note that Optiontown hangs onto your cash for a fair period of time. Some question the security of your cash while it is being held by Optiontown: what happens if Optiontown fails?
The benefit for the airline is that they can generate more revenue for very little effort. Air Asia stated that they are earning ancillary revenue in seven figures from Optiontown and have doubled their revenue from Optiontown in 2012 and plan to quadruple it in in 2013.
Massachusetts based, Optiontown have been quietly operating for four years. Sachin Goel is the founder and the CEO:. An interview with him is here:
The airlines which are using some or all of their services are:
- AeroMexico (Skyteam)
- Air Baltic
- Air India
- Air Europa (Skyteam)
- Estonian Airlines
- SAS (Star Alliance)
- Vietnam Airlines (Skyteam)
Malaysian Airlines used to offer Optiontown but seem to have discontinued the relationship. One wonders if this was because their proposed tie up with Air Asia fell through?
It will be interesting to see how many other companies jump on the bandwagon. It will be also interesting to see what happens when a major carrier like Turkish, United or Air France-KLM come on board. The downside, of course, for passengers in this new model, is that the day of being randomly offered a “free upgrade” are vanishing faster and faster. Why would an airline offer a customer a free upgrade when they can generate cash revenue for an otherwise empty seat?