Plusgrade’s Predictive Tech Allows Airline Customers to Pay to Block Seats
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There are various opinions on the concept of blocking airline seats – from both carriers and travelers. Plusgrade’s solution allows airlines to present the option to those who are most likely to want to pay for it.
Dynamic Seat Blocker, a product from ancillary revenue platform Plusgrade, allows travelers to purchase additional personal space on an aircraft by blocking the seat(s) around them. Seven airlines are expected to launch the service in the next month, including Royal Jordanian Airlines, Malaysia Airlines, Oman Air, Philippine Airlines and Etihad Airways.
“Our world has changed and as an airline, we need to adapt,” said Umesh Chhiber, senior vice-president of Revenue Optimization & Pricing at Oman Air. “However passengers want to fly, with someone sitting next to them or not, [Plusgrade’s technology] gives them the power to decide.”
Dynamic Seat Blocker is the latest version of Plusgrade’s Neighbor-Free Seat solution, which launched in 2017 as a way for airlines to offer economy-class passengers more personal space (Etihad was a customer). While the option to block seats was considered a benefit or nice-to-have back then, its has gained traction during the current pandemic.
“We expect this to be one of our greatest ancillary revenue generators moving forward.” – Abigael Wanjiru, Etihad Airways
Limiting aircraft capacity has been a topic of debate since the Centers for Disease Control and Prevention mandated social distancing – defined as maintaining at least six feet between people – as a means to reduce the spread of COVID-19. Proponents of seat blocking maintain that increasing the distance between passengers will reduce the likelihood of contagion during flights. Critics, including IATA, argue that HEPA filters and masks are sufficient to minimize the risk of contracting the virus, and that reducing capacity would result in increased ticket prices.
Frontier Airlines announced in early May that it would sell middle seats, starting at $39, but abandoned the plans following criticism from lawmakers that the airline was profiting from the pandemic. CEO Barry Biffle said the airline had decided to implement the policy because blocking all middle seats would drive up airfare prices by 50%.
On May 27, Canadian airline Flair began allowing customers to pay CAD$49 to block the middle seat in certain rows. Earlier this month, Vistara started allowing passengers to book an extra seat at full price. Low-cost carriers IndiGo and SpiceJet are also in the final stages of designing a seat-blocking product, which will be sold as an add-on service to customers at a lower price than the cost of a regular seat.
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United and American Airlines have returned to selling all available seats, while most other US airlines are continuing to limit capacity due to COVID-19. United chief communications officer Josh Earnest defended the airline’s decision stating that, even if the middle seat is blocked, passengers are still within six feet of each other, and calling the blocking of middle seats a “PR strategy.”
Win-Win Solution
According to an IATA study published this month, 65% of travelers are concerned about sitting next to someone who might be infected. Dynamic Seat Blocker gives concerned travelers the option to block seats around them, while generating ancillary revenue for airlines - a win-win situation for both travelers and airlines.
“We expect this to be one of our greatest ancillary revenue generators moving forward,” said Abigael Wanjiru, ancillary revenue strategy manager, Etihad Airways. Over 31% of respondents to a survey conducted by Plusgrade said they would purchase Dynamic Seat Blocker on a two-hour flight.
The option to block seats is presented to an airline customer in the lead up to a flight either via email, with push notifications or during check-in. While Plusgrade’s upgrade tool works by bidding, Dynamic Seat Blocker is a buy-on-the-spot offering, available up to one hour before departure. Customers block seats via the airline’s seatmap, and are then directed to a payment screen to complete the purchase. A confirmation email is sent to the customer, prompting them to continue with the check-in process.
“The algorithms are optimized to show the right product, to the right customer, at the right time to ensure highest likelihood to purchase.” – Pramod Jain, Plusgrade
“We integrate directly with the airline’s passenger service system (PSS) to manage seat selection and availability,” said Pramod Jain, Plusgrade’s chief operating officer. “The pricing will be determined by Plusgrade’s algorithms, but the min and max thresholds, along with other rule configurations, will be customized by the airline.” The implementation timeline is eight weeks, or four for existing Plusgrade clients.
“Dynamic Seat Blocker puts travelers in control of their experience, gives revenue management teams the tools they need to help their airline recover quickly, and allows airlines to have sustainable solutions well into the future,” said Ken Harris, CEO and founder of Plusgrade. “This is all possible due to recent advancements in predictive data that helped make Dynamic Seat Blocker a reality.”
Plusgrade’s secret sauce is its machine-learning technology, which targets airline customers who are most likely to purchase ancillaries. Factors taken into account include: passenger profile (trip history, tier status, social media preferences, purchasing data), route, day of travel, load factor and fare class configuration.
“The algorithms are optimized to show the right product, to the right customer, at the right time to ensure highest likelihood to purchase,” Jain explained. “Therefore, based on where and when they are traveling they will be shown the best offer for them to enjoy the best experience.”