Six major US airlines are to set-up Hotwire.com, a website selling surplus seating capacity that rivals existing online discounter Priceline.com. Based in San Francisco, the start-up is scheduled to launch this fall.
The project began life under the wraps a year ago and now boasts fifty employees and $75m in funding, the majority from private investment company Texas Pacific Group. Online air-ticket discounting is now big business and Priceline has built a large, if unprofitable, business from unsold seats on scheduled flights. About 30% of US airline capacity is unfilled on any given day.
Now the airlines themselves aim to cream-off this huge market and Hotwire.com’s members include American Airlines, America West Airlines, Continental Airlines, Northwest Airlines, United Airlines, and US Airways.
As with Priceline, the identity of the airline will not be disclosed by Hotwire until the consumer makes a purchase.
News source: Wall Street Journal