Travel website Kayak is partnering with buy now, pay later (BNPL) company Affirm to offer travelers more payment options as the cost of plane tickets increases. The partnership allows travelers to split the total cost of flights, lodging, and rental cars or car sharing greater than $150 into monthly payments. This move comes as the travel industry faces challenges such as pilot shortages, supply chain issues with new planes, and unpredictable weather events.
Kayak says its search demand is up 46% year over year, despite the 40% increase in the cost of plane tickets. Affirm Chief Revenue Officer Geoff Kott also noted that consumers in the fall of 2022 increased purchases at airlines over seven times compared to the prior year.
Companies using BNPL as an incentive to attract travelers is not a new concept. Last year, Delta Airlines teamed with American Express to give travelers a BNPL option, noting that two-thirds of Generation Z and millennial travelers would be more likely to vacation if they had the option of paying for their flights in installments.
Airlines have been launching digital innovations to improve various aspects of their business as the industry goes through a turbulent period. United Airlines launched a platform that lets corporate customers customize their business travel program contracts while choosing features like access to loyalty programs, more roomy seating, and discounts on leisure travel for employees. Southwest Airlines debuted a one-stop dashboard for customers to submit their requests for reimbursements and refunds when it was grappling with flight cancellations during the holidays.
Despite the challenges facing the industry, United CEO Scott Kirby said last week that his airline is hoping to turn around the pilot shortage by aggressively recruiting and onboarding 8,000 pilots in 2023. Additionally, the airline is addressing staffing shortages still connected to COVID-19.
“The FAA and most airlines, with the exception of the network carriers, have outgrown their technology infrastructure and simply cannot operate reliably in this more challenging environment,” he added, days after a system glitch that shut down U.S. air travel.
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