SpareFare helps travelers resell those pesky non-refundable tickets

Are you one of those people who buys last minute and non-refundable airfares? SpareFare might be your savior.

SpareFare helps travelers refund those pesky non-refundable tickets
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Most of my travel is booked well in advance. I’m kind of obsessive about my calendar and with a busy life to manage, I like to know what I’m up to weeks in advance. I’m also very loyal to one particular airline (here’s looking at you Air New Zealand) and am happy to pay a little more for a ticket on a top-shelf carrier that has good terms an conditions.

I realize, of course, not everyone is in the same position and there are lots of people who buy cheap flights or holiday packages and then come unstuck when plans change. This is where SpareFare comes in. The company created an online platform that aims to connect people who bought flights or holiday packages they can no longer use with people seeking urgent or discounted travel options.

The company was created last month by three young Londoners. The vision is that by transferring booked non-refundable tickets to SpareFare buyers, sellers can partially or fully recover the money they paid for the trips—while buyers get a true discount of up to 50 percent by not paying the current price of the tickets. Using the platform, buyers may also find the rare opportunity to get onto a sought-after flight that has been sold out for ages. Sounds perfect, right?

The loopholes SpareFare leverages

Many people are still unaware that they can resell their flights if they can't use them. People who do know this option exists rarely manage to find a trustworthy buyer for their tickets. While name changes might be seen like a security nightmare, the fact is many airlines allow ticket name changes for a fee, which is how a flight can be transferred to someone else.

The fees that airlines charge vary, but the important part is that many low-cost airlines offer this service on their websites and some regular airlines make an exception for special circumstances—such as illness. And even if the terms and conditions of your airline say tickets are not transferable, it is still worth calling customer service to check if they would make an exception for you.

Think about all of those refundable fares across the billions of tickets booked each year, and it is obvious that currently millions of flight tickets go to waste because there isn’t a liquid marketplace to resell them. SpareFare says the airlines that allow name changes fly about 600 million passengers per year.

According to an EasyJet spokesperson, in 2014 alone, 2.6 million of its passengers didn’t turn up for their flights—this implies a 4 percent no-show rate. If we conservatively assume half of the no-shows are people who are just late for their flights and that for half of the remainder, the low price of the fares meant it is hard to justify the name change fees, it leaves us with about 600,000 passengers who can resell their flights. This is where SpareFare flies to the rescue. The platform is a simple enough marketplace that helps connect the owners of the transferable tickets and holidays with travellers looking for a bargain.

How SpareFare works

SpareFare provides fraud protection to both sides by acting as an intermediary. The site incorporates a bidding system to help secure fair ticket pricing. In practice, the process is simple:

  1. The buyer suggests a price they are willing to pay.
  2. The seller can then accept or reject the offer. The process takes into account the current price of the flight, ensuring that the buyer always gets a true discount and the seller does not demand an unreasonably high price should the flight become cheaper. 
  3. The seller changes the name on the flight only after the buyer has sent SpareFare the money.
  4. The buyer confirms they have successfully received and reviewed the booking information.
  5. The seller will receive the money only after the buyer has gotten on the flight. Why make them wait? Most sellers will still have access to the booking after they change the name. As SpareFare holds the funds, sellers lack the incentive to change the name again in order to sell the flight to someone else. If sellers cheat, they will lose the name change fees already paid and the money held by SpareFare that will be refunded to the buyers. 

My POV

This is an obvious opportunity, and SpareFare’s solution looks simple. It does strike me, however, that this is an aviation security official's worst nightmare and provides a potential opportunity for nefarious activity. That said, from the perspectives of a ticket holder and someone wishing to travel, it makes sense. SpareFare as a neutral intermediary provides a logical service.

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