Virgin sold airline seat for 39p

Soon to be entered into the Guinness Book Of Records as the cheapest scheduled airline ticket ever, one lucky punter flew from Rome to Brussels on Richard Branson's Virgin Express last year for 39p.

The passenger had picked up his ticket on a Internet auction and since the airline concerned hadn't specified any minimum bid for the flight in question, it was duty bound to accept his bid and issue him with a ticket.

Every time a commercial airplane takes off with empty seats, it is trouble for the accountants. While budget airlines like Ryanair and easyJet rely on about 85 per cent capacity to turn a profit, even the big hitters like British Airways and United Airlines need to fulfill certain seat quotas in order to remain profitable. Because of the Kafaesquetype nature of airline ticketing prices (economy or business, weekend or weekday flight, one month stay or overnight, advance purchase or on-the-spot) and with everybody competing for the lowest-possible fare, there will nearly always be empty seats on every scheduled flight.

Due to sophisticated statistical and mathematical equations and the use of historical travelling data, airlines are now able to predict, quite accurately and a few months in advance, how many seats will be left unsold on a given flight.

Before the ubiquity of the Internet, the airlines used (and still use) a practice known as "fare dumping" to try and sell off these seats. Typically they would be advertised as "special offers". A certain amount of predicted unsold seats, sometimes as little as five on each flight, would be sold off for about half the usual price of the standard economy fare the airline willing to take a loss on these seats because any revenue is better than none.

Huge press campaigns would be run to advertise the "special offers", but because there were so few of the cheap seats available, many were left disappointed but once on the phone, decided to accept the full economy fare instead. A double whammy for the airlines.

Working on the eminently sensible principle that there'll always be someone, somewhere to fill an empty seat if the price is right, the airlines are now getting into direct, one-to-one contact with potential passengers through their Websites on the Internet.

Over the last few years, several airlines have been conducting low-key experiments in selling off unwanted tickets to online buyers. Instead of selling a ticket for a fixed, but cheap, price, the airlines introduced the idea of the auction, mainly because the punters like the drama of it all and the possibility of a real brag-about bargain

although it is worth noting that we only hear about the bargains, not the thousands of unsuccessful bidders.

Virgin Express, the low-fare wing of Virgin Airlines which as such needs to ensure almost full capacity on its flights to make a profit, first dabbled in Internet auctions earlier this year. Offering almost 1,000 tickets it couldn't sell by conventional means, it solicited bids from visitors to its Website (www.vigin-express.com) and sold off all the tickets at an average price of £33 which represented an unexpected bonus of £33,000 for the company.

Lufthansa followed suit soon afterwards and within the next year, most every airline is expected to follow the trend. A spokesperson for Aer Lingus said the company "is looking into" the area of Internet auctions.

The benefit of auctions for the consumer is that this is no mere electronic version of "stand by" you can book your seats up to two months in advance and even if you are outbid by someone you may still get the seat at the price you offered as industry insiders say that as many as 85 per cent of people who "win" the auction don't take up the offer of buying the seat, so it is offered to the next highest bidder.

While tickets for 39p are clearly rare (and no longer applicable because most airlines now specify a minimum bid), there are genuine bargains to be found if you're a bit flexible and a dab hand at auctioneering.

Curiously enough, the guaranteed real bargains to be found are mainly the business class seats as these are typically the most difficult for an airline to sell because of their exorbitant price.

There is now even a Website where you can type in where you want to fly to and when and how much you are willing to pay. The site, www.onsale.com, will then get back to you if they find a perfect match. At the moment, this site is only available for flights originating in the US.

The reason airlines have been low-key about their online auctions so far is that they're fearful of regular customers/frequent flyers delaying on booking their seats and holding out for an auction. They also don't like the situation where passengers start comparing how much, or how little, they paid for their tickets it doesn't go down too well with full fare paying passengers.

With the exception of Lufthansa, who pre-advertised the latest auction being staged by it today, the airlines never disclose when they're going to hold their auctions, instead asking you to keep a regular eye on their Websites which, handily enough, is a form of guaranteed advertising.

As this form of buying and selling looks set to increase in popularity in the next year, try not to be fooled by the hype and tales of a friend who travelled to Australia for £28.50.