A tech firm is touting Bitcoin payments on flight delays and cancellations, as per the blog post this week.
Bitcoin for Flight Delays
Bulgarian tech firm Colibra will pay Bitcoin to stranded travelers and vacation hopefuls if they end up getting stood up by the airlines they are traveling with. However, as with all the great things in life, terms and conditions do apply.
Colibra has been offering its payment-as-a-gratuity service since last year, but only added crypto as a payment option this week. The firm helps inconvenienced travelers to receive compensation.
Colibra is a community of travelers who share their right to receive compensations for 3+ hours flight delays (under EU261) so they can get paid for flights no airline would compensate (1 to 3-hour delays), as per its blog.
Miroslav Zaporozhanov, the co-founder of Colibra, explained the service to Lonely Planet:
“At first people seem to be puzzled how they can get compensated for flight delays that are not covered by the EU regulation [that pays out after three hours] and without having to pay anything upfront.”
He added that customers then learn the underlying principle, that all this is possible because “we collectively agree to share the downsides so that more of us can enjoy the upsides.”
Bitcoin Volatility in Mind
The firm has kept Bitcoin’s volatility in mind for the service. The pioneer crypto asset is known for its huge single-day price swings, such as a near-50% drop earlier this year in March. This has served as a key concern for widespread crypto adoption, that of losing payments and value based on factors out of one’s control.
To counter that, Colibra’s users can “lock-in” Bitcoin prices whenever they receive a payment, either on the day they travel for the flight or the actual day of travel.
For example, a frequent flier who booked a flight last week and locked in a rate on the app when Bitcoin was priced in the $11,000s would have gained a decent return from a flight delayed today, when BTC is above $12,000.
Airlines Do Not Follow Regulations
As per Zaporozhanov, over 85% of all rightful claims are never paid to affected travelers. Furthermore, there are millions of passengers that have their flights delayed and receive no compensation as regulations forbade it.
Therefore, Colibra states that it will guarantee a Bitcoin payout for any user delayed by one hour or more no matter what reason the airline provides.
A similar pilot was attempted in 2017 by insurance company AXA, which used a blockchain-based compensation process for passengers who unfortunately had their flights delayed by hours.