ChoiceSeats enables US Airways to fill more planes (with ancillary fees), and it is a humongous and growing revenue source for the airline.
US Airways’ ChoiceSeats is a huge revenue-driver, and yesterday the airline announced that ChoiceSeats would be available for the first time online beyond US Airways’ direct-sales channels at online travel agencies CheapOAir and sister company OneTravel.
ChoiceSeats are window and aisle seats, and although they don’t offer extra legroom, they are located toward the front of coach, and passengers who reserve them can board in Zone 2, and are among the first to exit the aircraft. The fees for ChoiceSeats reportedly range from $5 to $30 per segment, varying by flight length, time of day, and the destination.
Scott Kirby, US Airways president and part of the management team planning the integration of US Airways and American Airlines, said yesterday that ChoiceSeats “is now running at a run rate of about $100 million a year for us, and it can grow much larger as we expand the scope of distribution.”
The airline chose Fareportal, which operates businesses including CheapOair, OneTravel, and corporate travel agency Travelong, as its first OTA distribution partner for ChoiceSeats. They will be available for sale on CheapOair and OneTravel after customers choose US Airways flights, in other words, in the booking path.
“Fareportal recognized the value/convenience of offering ChoiceSeats to their customers so they invested in the technology solution launched yesterday,” John Gustafson, US Airways’ vice president of eCommerce, mobile and distribution, tells Skift. “The product is also available to all Sabre subscribers.”
This is a big win for Fareportal/CheapOair as US Airways decided to partner with them for ChoiceSeats distribution instead of the usual suspects, Expedia, Priceline, Orbitz, or Travelocity.
If Choice Seats eventually is offered on the new American Airlines, with the merger with US Airways slated to take place in the August or September timeframe, then this is an even more significant win for CheapOair.
Fareportal says its websites “recently ranked ahead of both Orbitz and Travelocity in online visitor share,” although Kirby referred to the airline’s OTA partner as “the fifth largest online travel agent.”
US Airways’ Kirby discussed the partnership during the airline’s first quarter conference call yesterday.
Apart from the bare-bones economics of the deal and the fact that CheapOair apparently footed much of its development costs, another factor behind the agreement is that US Airways is providing some support to CheapOair, which was shunned a couple of years ago by US Airways’ rival Delta. CheapOair still doesn’t offer Delta’s flights.
At any rate, Kirby sees big things for ChoiceSeats as the airline broadens its sale channels, arguing it “has significant upside in the hundreds of millions of dollars.”