Selling Price Protection on Airline Tickets

Quasi-stealth mode startup Yapta is offering a new wrinkle on airline tickets. First, travel sites like Expedia gave buyers unprecedented visibility and power by allowing them to conveniently buy airline tickets from multiple carriers. Then sites like Farecast offered predictions of future airfares, and the ability to lock-in prices on certain flights. Now Yapta (Your Amazing Personal Travel Assistant) allows you to buy a ticket, and if the price goes down, capture a portion of the benefit.

Airline prices do not rise predictably as the date of travel approaches. As The Next Net reports, prices can fluctuate pretty wildly. Most airlines offer to refund the difference, minus a fee, if the price drops after you buy your ticket. But who has time to keep checking? Yapta does, of course. Yapta CEO Tom Romary says that his beta users, presumably frequent fliers, have saved an average of $500 over the first 3 months.

If you’re neither a buyer or seller of airline tickets, you may think this is an amusing exercise. However, the ability to create new online markets easily, whether for airline ticket refunds, or any other market with price variability and uncertainty, will have a far broader impact. The original sellers should think about how to serve customers seeking assured pricing and/or supply so that they can capture this value, rather than passing it on to middlemen, as has happened in the event ticket business.