World’s First Airline to Accept Bitcoin Misses a Big Opportunity

AirBaltic may be the first airline to accept cryptocurrency, but the transaction fee is missing the point of bitcoin.

AccessTimeIconJul 23, 2014 at 6:31 p.m. UTC
Updated Sep 11, 2021 at 11:00 a.m. UTC
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Neil Murray is an entrepreneur and writer involved in the Nordic and European startup scene. He runs The Nordic Web, a content and data provider, alongside VIP VoIP, an event series which connects local startup ecosystems with global tech players. Here, he discusses the perks of bitcoin as both a marketing tool and a cheaper transaction method.

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Screen Shot 2014-07-23 at 2.07.16 PM

This week, Latvia’s national airline, airBaltic, confirmed that it is now accepting bitcoin, and that in doing so, it became the first airline that accepts bitcoin directly, rather than through a third party.

— airBaltic (@airBaltic) July 22, 2014

This is a positive move for those that want bitcoin to evolve into a mainstream currency that can be used for the purchase of everyday goods and utilities, and it could lead competitors to also offer a bitcoin payment option. The immediate knock-on effect could be that Expedia will start accepting bitcoin for flight bookings, in addition to hotel bookings that you can already make with the cryptocurrency.

By becoming the first airline to accept bitcoin, airBaltic has surely stolen a march on everybody else. However, the firm has missed a trick. The dreaded transaction fee.

Yes, even when booking a flight with bitcoin, the transaction fee is €5.99.


AirBaltic explained:

"The transaction fee is to cover the costs associated with processing and handling the booking rather than the bitcoin itself."

Yet, a processing and handling fee typically is meant to cover costs from processing the payment. So, where in this case there is practically none, it is not clear why this expense still applies. Surely, the handling of the booking itself would already be accounted for in its salaries and expenses, as this is the main purpose and reason for the business's existence, so it would seem pretty odd not to have this factored into its costs already.

There is no transaction fee when using an airBaltic card, for example, which demonstrates that the main purpose of these fees are deterrents, aimed to encourage customers to avoid other payment methods and to take advantage of the benefits of being an airBaltic cardholder.

Having broken ground in becoming the first airline to accept bitcoin, it makes no sense to essentially deter people from using it. Otherwise it is no more than a publicity stunt, which to be fair to them has done the airline pretty well so far already, with the bitcoin community buzzing about this news.

AirBaltic was quick to spot a big opportunity with bitcoin, I just hope they don’t let an even bigger one pass them by.

This post originally appeared on Medium, and has been republished here with Neil's permission.

Disclaimer: The views expressed in this article are those of the author and do not necessarily represent the views of, and should not be attributed to, CoinDesk.

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