Air Canada invites passengers to make cash offer to sit in better class

You've bought an economy class ticket because you like the price. But you shudder at the thought of your cramped seat and the scramble to find room for your carry-on.

If you're willing to offer up some extra bucks to improve your experience, Air Canada might have a deal for you. The airline is rolling out an auction-style program where passengers can make a cash bid to upgrade their seat to premium economy or business class.

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Bids are made online using a sliding scale with a set minimum and maximum amount. When passengers pick their price, a chart lets them know the strength of their offer.

Travellers find out if they have the winning bid about 48 hours before departure.

Air Canada's program is only available for select flights, depending on market demand. Eligible customers will get an email 10 days before takeoff, inviting them to make an offer. Passengers can also plug in their flight number on Air Canada's website to check eligibility.

"The program is designed to generate additional revenue by offering customers an opportunity to upgrade at the last minute," Air Canada spokesperson Peter Fitzpatrick stated in an email to CBC News. He said the program will be fully implemented across the network by this summer.

The Air Canada bidding system is run by the Montreal-based company, Plusgrade. Its clients include Lufthansa, Air China, Swiss Air Lines and Qantas Airways, which also offer the bid program.

Bidder loses out

Ottawa-based travel blogger Anshul Singh recently bid to upgrade his Air Canada flight from Toronto to Dubai.

He was booked in premium economy and made an offer for a seat in business class, for the extra perks: "Lie-flat bed so I can sleep, the biggest thing. Food is way better, alcohol, champagne," said Singh.

He had paid $718 for his flight. The business class ticket was $2,248 — a difference of $1,530. Singh was allowed to bid between $400 and $900 for the upgrade.

He offered $500. The Air Canada system warned him it was a low bid.

Even though he knew it was a long shot, Singh still felt let down when he learned his offer had been rejected. "I was a little disappointed that $500 didn't cut it."

Singh recommends people do their research before making an offer. That's because there's no indication on the bid site of the actual cost of the class you want to upgrade to.

"There's no clear parameter put in front of you other than a little slider that tells you a good, bad or best [bid] based on Air Canada's presumption," he said.

Pay up for comfort

These days, airlines charge passengers extra for everything from meals to seat selection. Encouraging customers to pay more for empty seats in a higher class is one more way to increase profits, said independent airline analyst Rick Erickson.

"If you can find a way to fill up those seats, that's ancillary revenue and that's why the airlines are going to pursue this."

Erickson believes a big target for the bid upgrade is economy passengers who can't quite bring themselves to pay for a premium seat, but yearn for a more comfortable experience.

"The really bottom of the barrel ticket is pretty crummy. You're crammed in there," said Erickson who is based in Calgary.

Passengers who move up to premium economy class get perks like a larger seat, more legroom and priority airport services.

And by encouraging customers to upgrade at a discount, Air Canada might whet their appetite for higher priced flights in the future, said Erickson.

"They want them to get a taste of what the business class or the premium economy class has on offer," he said.

Annoying for those paying full price?

Erickson warns that airlines walk a fine line when they offer upgrades at a potential discount.

That's because they risk angering passengers who paid full price for a premium seat.

"The last thing you want to do is annoy those passengers," said Erickson. "You don't want to condition them into thinking that a cheaper price could be had."

According to Air Canada, only a small percentage of premium seats will be available for bidding. "Most are already sold to customers who like the certainty of knowing they have confirmed space in the premium cabin," Fitzpatrick said.

Air Canada also offers a separate upgrade program. Sometimes when passengers check in online for their flight, they receive an offer to move up to a higher class for a specified price.