Private aviation company PrivateFly announced today that almost 20% of its yearly revenues are now coming from travelers paying with bitcoin. The online cryptocurrency jumped as a form of payment over the past two months but previously made up a marginal amount of revenue. Despite its growing popularity, few airlines accept bitcoin, we’ve had a look at why this is.
According to the company’s latest figures, 12% of flights made in December were paid for using bitcoin. This increased again to 13% in January; a huge increase as previously only around 2% of flights were paid for using the digital currency.
Bitcoin pioneers reaping the benefits
The company says that the jump in revenues is even more considerable as those paying with bitcoin tend to be spending more money on more expensive flights.
According to a press release seen by Simple Flying, PrivateFly CEO Adam Twidell said,
“Some of these are clients who are looking to realise their gains, while others want to hold onto their cryptocurrency, in expectation of future increases. So, in addition to taking out a membership with us in Bitcoin and converting the account funds into traditional currency (as we have offered for a while), we now offer a membership program that allows the account funds to stay in Bitcoin.”
PrivateFly started offering bitcoin payment options in 2014 when a tech entrepreneur flew from Brussel to Nice and paid using bitcoin. Its new membership program allows travelers to place bitcoin currency in an account that will be charged using the value of bitcoin at the time of booking. If passengers want to keep their bitcoin, they can add another payment option and use another currency.
PrivateFly also accepts BitPay, Bitcoin Cash, Thereum, and four USD-pegged stable coins; GUSD, USDC, PAX, and BUSD.
The pros and cons of bitcoin
Most standard commercial airlines do not accept bitcoin as a form of payment. Anyone looking to use bitcoin would have to go through a third-party travel agent. However, a few commercial airlines have jumped onto the cryptocurrency trend. LOT Polish Airlines started accepting bitcoin payments way back in 2015, a year after airBaltic became the first commercial airline to accept the payment form. Japanese startup airline Peach Airlines also accepts bitcoin payments.
Yet, most major airlines seem reluctant to accept bitcoin as a form of payment. This is slightly puzzling as bitcoin is truly an international currency, so it could be accepted worldwide by airlines. However, this also works against the currency as no internal body regulates its value or usage. This makes it volatile, unstable, and difficult to predict its long-term value. If airlines want one thing right now, it’s stability. Losing a chunk of cash revenue from ticket sales because the cryptocurrency value crashed could be devastating to an airline. Research into the currency suggests its value is more easily manipulated by online traders than other currencies.
However, passenger demand is clearly growing; third-party websites have sprung up facilitating bitcoin payments for flights. The lack of processing and transaction fees, which impact other merchants such as VISA and Mastercard, are also attractive to passengers.
PrivateFly’s results clearly show that those with bitcoin are willing to spend it on flights. The private aviation company is capitalizing on this, suggesting that other airlines might be missing a trick. But will the increase in bitcoin sales last? Who knows, for now, most airlines seem happy playing it safe.
What do you think of bitcoin payments? Are airlines missing out, or are they right to stay out of it? We’d love to know what you think!