Ever since their inception in 2009, the digital currency known as “bitcoin” has been growing in popularity both among internet-dwellers as well as the mainstream. Despite issues with stability and governance, bitcoin is now widely used and accepted by numerous companies across a range of industries. Everything from a new car to a hotel room to a flight into space are now all purchasable via bitcoin.
Will bitcoin acceptance spread to the airline industry?
For frequent travellers and many members of the airline industry, the question recently has been whether or not bitcoin would eventually be accepted by major airlines as a legitimate form of airline payments for seats, upgrades, etc.
There are a number of reasons why the airline industry in particular would be interested in bitcoin: First, bitcoin is a genuinely-international currency, with no central authority or governing body regulating its value. Of course, this fact also makes it difficult to predict the long-term value of each bitcoin, rendering it difficult to predict and manage airline payments and holdings of bitcoin.
The other major reason why the airline industry has been considering bitcoin is because of the dramatically reduced transaction fees that bitcoin would offer. One of the distinct advantages of bitcoin is the fact that there is no centralized merchant (such as VISA or Mastercard) taking a percentage of each transaction. In addition, there are no currency exchange fees associated with bitcoin, unless of course one intends on converting the bitcoins into a traditional form of currency (like the US Dollar or the Euro).
Ultimately, while bitcoin does offer the promise of lower fees and costs for industries such as the airline industry, there are still a lot of elements that must be ironed out.
What parts of the airline industry are already accepting bitcoin?
Despite the many challenges associated with integrating bitcoin into airline industry payments, there are already a few airlines trying to utilize them in their businesses. For example, the Latvian airline airBaltic accepts bitcoins in exchange for tickets on their flights. The Latvian airline is the first major airline to accept bitcoin, and will do so by offering it as an option upon checkout. The third-party payment processor Bitpay will be used by airBaltic to actually accept the payment, and will automatically convert the payment into Euros with which airBaltic will actually get paid. Thus, it is not so much that airBaltic is receiving payment in bitcoin, but rather that it is allowing its customers to pay for their tickets using the burgeoning digital currency.
While airBaltic is the first, it is almost certain not to be the last airline that will accept bitcoin on their flights. As the currency grows in popularity (and, hopefully, stability), it is likely that other airlines will join airBaltic in accepting digital currencies like bitcoin.