Flying the Friendly Skies One Installment Payment at a Time

Traveling by Air One Installment Payment at a Time

Buy now, and fly the friendly skies — but pay over time.

Buy now, pay later (BNPL) options are finding wide berth across any number of verticals. Breaking larger ticket purchases into smaller increments can be useful to close the sale in a way that gives recurring cash flow and visibility to the merchant.

One of the latest examples lies with Delta Air Lines. The company will offer BNPL to its travelers as a payment option for tickets over $100. The BNPL feature, available to American Express cardholders in the United States, will tap American Express’ Plan It options. The feature will be folded into the Fly Delta app beginning this spring.

Read more: Delta Launches BNPL Offering With AmEx

Consumers can divide the purchases into equal monthly installments with a fixed fee.

Other Airlines Too

Those are the mechanics of the deal. Delta is only among the latest carriers to embrace BNPL.

American Airlines has already struck a pact with Affirm to offer installments.

See more: Affirm Teams With American Airlines to Bring BNPL Option to Travelers

And in a what seems a more limited (regional) rollout, earlier this year, Uplift, a BNPL solution, said it is expanding an in-place partnership with Southwest Airlines to offer payment options for travel to Hawaii.

Read more: BNPL Firm Uplift Teams With Southwest Airlines on Hawaiian Travel

The airline use case makes sense, as travel is among the larger ticket items on which consumers spend their money. A quick scan of the Bureau of Transportation’s website reveals that the average domestic fare (as listed by origin city) in the third quarter of last year stretched well into the mid-$300 range.

PYMNTS’ data show that consumers are spending more on travel-related activities. The average amount consumers spent on travel purchases rose from $381 in December to $507 in January. Overall, consumers spent $23.4 billion on travel purchases in January.

See more: COVID-19 Didn’t Cramp Americans’ January Travel Plans

For the airlines, offering BNPL may be a way to help consumers click the buy button as they also grapple with inflation. They may balk at ticket prices at first glance, especially when juggling other, fixed expenses (mortgage payments or credit card debt).

That tailwind may be especially welcome across air travel, where as an industry, the overall rate of recovery across business and passenger related travel is, in January and looking into February, for Delta at least, at about 70% of pre-pandemic levels, where it had been 80%. BNPL may be enough to provide some additional tailwind to revenue momentum.

Read more: Airlines’ Earnings Show Continued Gains in Cargo Business, Corporate Travel Rebound

BNPL, as we have seen in past research, is increasingly being used as a budgeting tool across demographics. That’s especially true for what we at PYMNTS have defined as “worry free” consumers who have sought out alternatives to traditional credit.

See more: BNPL User Personas Proving That Installments Have Value Beyond Instant Gratification