Dynamic Flight Auctions: The Case of Fareplace

Fareplace is a travel-tech company specializing in real-time bidding solutions for airline ticket sales. Their platform enables airlines to auction off distressed inventory, offering passengers the opportunity to bid on seats and secure dynamic pricing. By integrating with airline revenue management systems, Fareplace helps optimize seat occupancy rates and boost ancillary revenue.
As part of Cockpit Innovation’s broader organizational innovation efforts within EL AL Airlines, the airline partnered with Fareplace (formerly BidFlyer) to explore new approaches to optimizing seat sales. The goal was to improve load factors, increase revenue, and create a more engaging experience for travelers through dynamic flight auctions. The pilot involved integrating Fareplace’s platform with EL AL’s inventory to offer last-minute tickets via a competitive bidding model. The outcome was a measurable increase in yield, stronger passenger engagement, and a scalable framework for applying dynamic pricing across routes.

---

The Challenge

Like many airlines, EL AL faced challenges in optimizing last-minute seat sales. Unfilled seats resulted in lost revenue, while traditional discounting strategies risked devaluing premium ticket pricing. The airline needed a data-driven, real-time solution to maximize revenue per available seat while ensuring a seamless user experience.

Key Pain Points:

• • • Low last-minute occupancy rates affecting revenue.
    • Price-sensitive travelers looking for deals without undercutting premium fares.
    • Lack of a dynamic bidding mechanism to monetize distressed inventory.

---

The Solution

The Fareplace Auction Platform offered:

 

✅ AI-Driven Dynamic Pricing – Learning from past auction behavior to optimize bid strategies.
✅ Seamless Integration – Direct link with EL AL’s inventory management, ensuring updated seat availability.
✅ Engaging Bidding Experience – Passengers could bid on premium economy and business seats, maximizing EL AL’s revenue potential.
✅ Multi-Language & Custom Branding – Tailored to EL AL’s

 

look and feel, ensuring a smooth passenger journey.

---

Implementation Process:

• • • Beta MVP Deployment: A fully embedded auction platform on EL AL’s website.
    • A/B Testing with Travelers: Tracking conversion rates and engagement.
    • Data Analytics & Yield Optimization: Machine learning models continuously improved auction pricing models.

---

Results & Key Takeaways

The POC demonstrated measurable improvements across multiple metrics:

✅ Increased Load Factor Efficiency – More empty seats filled through the auction model.
✅ Higher Revenue Per Available Seat (RASM) – Optimized pricing strategy without affecting traditional fare structures.
✅ Enhanced Passenger Engagement – New touchpoint for travelers to interact with EL AL.
✅ Scalable Model for Future Expansion – The auction engine could be applied to additional routes and classes.

---

Lessons Learned & Future Implications

• • Dynamic pricing solutions are key for airlines seeking revenue optimization.
  • Customer engagement is crucial—offering gamified, bid-based models increases interaction.
  • Seamless integration with airline systems is necessary for scalability.

Given the success of the POC, Fareplace has since evolved into a leading player in airline auction models, proving that data-driven bidding mechanisms can transform seat sales.

---

Join the Fast Pass to POC Program

Are you developing an innovative solution for the aviation industry? Fast Pass to POC connects startups with leading airlines to test, validate, and scale real-world innovations.

Apply now and be part of the future of aviation!

---