NFT Ticket Benefits for Consumers
NFT tickets are an established, consumer friendly technology offering great benefits for air travellers
One of the fun things about working at an airline is taking advantage of the travel opportunities. The first experience however is anxiety. You never know until the last minute whether or not you will be spending ten hours sitting in a comfy business class seat or an upright jump seat that does not even have it’s own entertainment screen.
If you are travelling in peak holiday season you might be glad even to get on the plane at all. Airlines first accommodate paying passengers and staff travelling on duty. Only then do they allocate the remaining seats to staff, which is strictly by seniority.
But once your boarding pass is in hand you are free to proceed and look forward to the flight. It is interesting and sometimes even entertaining to sit back and watch the passengers move through. Your favourite airline revenue economist once saw a travelling circus checking in their unicycles, poles and clear bags stuffed with colourful clown wigs.
Going to the airport is good for airline managers because it helps us remember that the passengers we serve are living and breathing people. They are not numbers on a spreadsheet or inputs to a whizzy revenue optimisation algorithm.
Here on the Airline Revenue Economics I have been writing about NFT tickets powered by blockchain technology from the perspective of airlines. The first ever NFT ticket was auctioned at the Eiffel Tower for more than one million Dollars in 2022. This special coupon was good for a business class ride on Air Europa and featured colourful artwork by trendy artist Carlos Betancourt.
But as I have explained, using NFT technology and blockchains to sell airline tickets is about creating secure contracts, not trendy artwork (see article).
My next article (see here) presented three ways that the market for air travel is inefficient. I showed how by enabling ticket trading, tricky in practice with traditional tickets whose validity cannot be confirmed on resale, airlines can unlock new economic benefits and previously untapped revenue streams. A third article (see here) went in to more detail about how those revenue benefits materialise.
But all those articles were about the benefits of blockchain ticketing technology for airlines, who are only half of the travel market. Today it is time to explore how NFT tickets and blockchain technology are helpful for the other half – the passengers! Read on to find out more…
NFT tickets are an established, consumer friendly technology
Consumers are already buying into the idea of ticket resale. Look at Ticketmaster, where it is easy for people to buy and sell their tickets. The user experience on Ticketmaster is simple. For any concert and you can see a plan of which seats are available.
Nifty colour coding quickly shows how expensive each seat is and whether or not it is sold by the original vendor or a reseller. People hold their tickets in an electronic wallet. Ticketmaster’s technology assures people they are buying the real thing, not like buying from dodgy scalpers outside the doors.
Trading airline tickets should be just as easy. The idea behind NFT tickets is that booking and buying tickets is just the same as the regular travel searches that people are already familiar with from online travel agents and airline Internet booking engines.
The wallet where the token-tickets are stored is just like what consumers are used to with cinema and concert tickets. People love not having to fiddle around with paper tickets anymore. Ticketmaster already sells verified resale tickets and people are already using Ticketmaster well.
But when they get to the airport they are already using their phones to carry boarding passes. At this stage the user experience is unchanged, so from a consumer’s perspective NFT tickets are not a disruption but an evolution.
Book with confidence
Passengers today know that if they do not use their ticket the money will be wasted. It is likely that some people never buy tickets at all as a result. But with NFT tickets, passengers will be able to offer their tickets for re-sale in the secondary market.
It is likely that airlines will experience more demand as a result, increasing seat sales and pushing up revenue. Some passengers will be able to make more trips than they might otherwise, enjoying the benefits of travel slightly more than they do today.
Airlines can keep offering value added services right up to departure
Airlines can decide when the window for passengers to re-sell tickets closes. 72 hours prior to departure to be common, as this is typically when airport dispatch control systems take over from the bookings and reservations environment. Different windows might close at different times at different airlines, or even at the same airline across different routes. This is partly so airlines can be sure exactly who is coming and prepare accordingly.
But it also allows airlines to capture full economic value from last minute bookers, whose urgent and important travel needs are often characterised by high willingness to pay. Third, this is also the time when operational issues materialise, so airlines can be sure they are offering disruption recovery to the right people.
But just because passengers will no longer be able to re-sell tickets after flights move to airport control that does not mean that there is no longer any benefits or value from an NFT ticket ecosystem.
Airlines will be able to keep offering discounts, deals, promos and incentives to passengers right up to departure. Sometimes these will be practical, such as looking for volunteers due to an overbooking situation before people have even left for the airport, saving passengers an unnecessary journey.
Sometimes the airline will offer ‘specials’ that are targeted at specific passengers. One example might be an upgrade to a more comfy seat at a low price to attract somebody who has not experienced the airline’s premium cabin before. Because a record is kept in the blockchain about exactly what products have been offered and who has accepted them, airlines will be able to examine the success of their initiatives at a more granular level.
Today’s distribution technology is one-way – airlines offer value-added services to passengers. But with NFT tickets passengers will be able to make offers back to airlines and to other passengers too.
If a flyer wants to offer another passenger money to swap seats they can do so, and the airline might take a 10% cut, say 10%. If a flyer wants to pay $500 to upgrade and the published price is $5,000, they can make an offer to the airline and the airline decides whether to accept.
This will have a similar outcome to today’s upgrade auction platforms, only with NFT tickets airlines will be able to tailor which offers they do and do not accept at a much more granular level. When IATA’s One ID arrives and airlines have full visibility about exactly who they are receiving offers from NFT tickets will get even better.
In the end more passengers will receive the service they want at the time of departure. This corrects a big issue with the airline market that people are so price sensitive at the time of booking that when the flight is imminent they find the experience dismal.
Passengers can enjoy more services than ever before with NDC
NFTickets should complement rather than substitute for the innovation enabled by IATA’s New Distribution Capability (NDC, a communications standard) and One Order (a booking amalgamation platform).
Airlines are arguably starting to become true retailers with the help of NDC. For the first time ever they can package everything that a passenger might want on their journey with flights, from restaurant meals and meeting rooms to bungee jumping and whale watchihg.
NFT tickets will make it easy to bundle these new products with seats because the underlying blockchain technology holds complete and transparent records about exactly what the traveller has purchased, just what One Order was designed for.
People will be able to use NFT ticket market places to mix and match exactly what they want to go with their flights and the airline will earn revenue from transactions enabled by NDC under the commission structure described above.
It may also be possible for airlines to benefit when people add travel products not offered by the airline to their flights. This will happen because NFT tickets reduce the hassle of creating travel packages. So in the end more people will buy more tickets.
Aligning the services which people add to their bookings is much easier than with a traditional PNR-based approach. Rather than creating unwieldy PNRs (bookings) with lots of entries that are vulnerable to IT slip-ups, each PNR will hold a reference to the relevant block on a chain, known as a hash.
Servicing bookings will be much less cumbersome than at present. This is because it will be easier for agents and systems to hone in on the relevant hash and then link to the fast blockchain technology rather than scanning large number of entries in a traditional clunky PNR.
Passengers should find it easy to adjust their bookings and more servicing will be automated in the NFTicket environment than airlines achieve today.
That’s all from me today. Do you fancy working with one of the most creative airline specialists in the world today. I’m currently available to take on new clients. Please get in touch to discuss how I might be able to help.
oliver AT ransonprcing DOT com