Last week, Latvian airline AirBaltic became the very first European airline to accept bitcoin for flight bookings. This came with a wave of controversy from both inside Latvia and from digital currency users who were upset about the company applying a €5.99 ($8.05) fee on bitcoin transactions.
In response to AirBaltic moving ahead with adopting bitcoin, the Latvian government and central bank warned the consumers should avoid using the virtual currency because of the various threats and risks posed by the cryptocurrency. Since Nov. 2011, the federal government has been a 99.8 percent majority shareholder after it bailed out the fledgling airline.
After outrage among the bitcoin community over the transaction fee, which is the same cost as a customer who pays with a credit card, the airline removed the fee without an announcement or much notice.
Soon after the criticism was made in news reports, AirBaltic defended the fee by arguing that the bitcoin transaction fee was meant to cover the cost of processing bookings, but the bitcoin community averred that the whole premise behind accepting bitcoin is to maintain low or zero transaction fees.
On late Friday, BitPay issued a tweet that AirBaltic had actually removed the fee and paying. The Latvian airline has not yet responded to any media outlets for requests for comments.
Hooray! @airBaltic now makes it free to pay with #bitcoin pic.twitter.com/XqzdEVJWht
— BitPay (@BitPay) July 24, 2014
“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,” said Stephanie Wargo, BitPay’s VP of Marketing, in an interview with CoinDesk .
When it comes to the travel industry, there are a handful of companies that have already incorporated bitcoin into their business model. We reported that Expedia began to accept bitcoin for hotel bookings, while CheapAir began allowing customers to pay with bitcoins for flight bookings last year.
