UPDATE (16:55 BST 25th July): Updated with comment from BitPay.
Latvian airline airBaltic has decided to eliminate its controversial transaction charge on bitcoin purchases.
Earlier this week, the firm became the first European airline to accept bitcoin for flight bookings. The news was covered by digital currency news outlets and even some mainstream media, putting Latvia firmly on the cryptocurrency map.
However, enthusiasm soon waned after it emerged that the airline was still charging its standard €5.99 fee on bitcoin transactions – the same as customers paying with a credit card.
Prompt u-turn
The airline originally responded to the criticism by explaining that the transaction fee is actually used to cover the cost of processing bookings rather than the transactions themselves.
However, many in the bitcoin community felt the airline was missing the whole point of accepting bitcoin, which offers tiny or no transaction fees.
It did not take long for airBaltic to review its policies – in the face of cryptocurrency community discontent, perhaps – and the airline has now waived transaction fees on bitcoin payments altogether.
The update could have gone unnoticed had it not been for BitPay, which tweeted the news last night:
Hooray! @airBaltic now makes it free to pay with #bitcoinpic.twitter.com/XqzdEVJWht
— BitPay (@BitPay) July 24, 2014
Stephanie Wargo, BitPay’s VP of Marketing told CoinDesk:
“Part of our mission is to help educate merchants on bitcoins and in working with airBaltic we pointed out that fees for bitcoin payment processing are substantially lower than credit cards and other forms of payment. As a result they dropped any fees for paying with bitcoin and pass those savings on to the consumer.”
CoinDesk has reached out to airBaltic for comment, but has not yet received a reply.
Travelling with bitcoin
Although airBaltic is the first airline to accept bitcoin, there are already a number of ways to spend bitcoin in the travel industry and to some extent in the hospitality industry.
Expedia began accepting bitcoin for hotel bookings last month, but it has not yet started accepting bitcoin for flight bookings. The company recently told CoinDesk that the response to its bitcoin push has been better than anticipated, but it stopped short of disclosing any figures.
As far as flight bookings go, CheapAir started accepting bitcoin last year. CheapAir has since expanded its services to 200,000 partner hotels and railway offerings, and recently announced it has topped $1.5m in total bitcoin sales.
AirBaltic aeroplane image via Aleksandrs Samuilovs / Wikimedia Commons
Disclaimer: CoinDesk founder Shakil Khan is an investor in BitPay.