Three reasons why JetBlue’s eBay store is a genius move and why other airlines will follow

Selling air tickets by auction is nothing new. Airlines have done it in the past for one-off charitable causes, like Singapore Airlines’ first A380 flight. There are even sites dedicated to selling air tickets by auction, like Skyauction.com and Priceline.com.

But JetBlue Airways has once again demonstrated that it’s a leader when it comes to using the latest technologies to bring in more business. This time, they’ve began auctioning more than 300 round-trip flights and six vacation packages on eBay, and all of the offerings carry a starting price tag of five or ten cents plus taxes and fees. The auction will continue through Sept. 14.

There has been ample debate on leading airline forums on whether this move will work or not. The debates can go on forever, but here are three good reasons why this is a genius move by JetBlue and other smart airlines will follow in its footsteps.

1. There is no such thing as bad PR

JetBlue is good at creating buzz and has now tapped on probably one of the cheapest ways of methods of marketing – technology. Since the website’s launch, there has been many reports supporting or criticizing the move. Ultimately, it’s all leading to move potential customers landing on the JetBlue eBay store. As Guy Kawasaki puts it, there is no such thing as bad PR (an Inquirer report that rated his Truemors site as the worst on the net resulted in over 240,000 hits in a single day!).

2. More channels = more customers = more revenues

Leading brand management authority Sergio Zyman‘s definition of marketing success is to “sell more stuff, to more people, more often, for more money, more efficiently.” By launching a new selling channel via eBay, JetBlue will be reaching out to new types of potential customers who are probably younger and technologically savvy. Moreover, since eBay is a self-regulated system, the efficiency of selling tickets is bound to improve as well.

This channel is also different from traditional auction sites like Priceline.com, since JetBlue need not pay any commission to the “middle-man”. Hence, the revenue per ticket is also greater.

3. Cheap, real-time market research

Most of the prices JetBlue gets out of these auctions will probably be lower than their usual price, but higher for some valued routes. This type of data – who wants what tickets at what price in a fairly un-biased system – is invaluable.

Perhaps JetBlue is testing alternate pricing power controls that may challenge the historical yield management viewpoints and processes. Eventually, this market research will allow JetBlue to optimize its own fare generation mechanism for specific target markets. Best of all, it’s free!

So, do you think that this is indeed a good move by JetBlue Airways? Can other airlines follow in their footsteps, or is it something unique to JetBlue that enables them to do this?

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