Expedia, Southwest and United seek more sales through installment plans.
Airlines and travel agencies are encouraging more flyers to take that trip of a lifetime by introducing installment loans into their sales process. Skift reports two companies are working to change how individuals purchase their airfare.
UpLift, one of the two major companies in the space, is working with JetBlue, Spirit Airlines, Southwest Airlines and United Airlines to offer loans to potential flyers. During checkout, travelers can apply for a UpLift loan to cover their upfront costs. According to the company, the average loan is $2,420, with “highly-qualified” borrowers charged an 8.99 interest rate. UpLift told Skift up to 10 percent of purchases with their partners are financed through one of their loans.
Expedia’s brands are working with Affirm, another lender focused on approving more flyers at favorable terms. When a flyer selects Affirm at checkout, the trip is paid for by the loan company, who then charges the flyer in monthly payments. Through their underwriting model, Affirm claims their approval rates are “126 percent” higher than industry averages.
Loan programs are not the only ones being experimented on in the travel industry. Two years ago, Airfordable launched as a travel layaway program. When a traveler selects a flight with Airfordable, the service charges a flat 20 percent fee, giving the traveler up to the departure date to take the trip. If they cancel their trip, they can have their paid balance to a future flight with the layaway service.
The new products are the second generation of payment options in the travel sphere. Previously, United and others worked with a PayPal service which allowed installment payments, before it was shut down due to regulatory concerns.