Fraud, flights and frustration during the holidays

Airlines face two distinct but interconnected types of fraud:

Booking fraud: occurs before travel and is when criminals manipulate reservation systems using stolen cards, bots, or false accounts, and
Inflight fraud: happens once passengers are onboard and exploit offline payment environments to make purchases that are never safely authorised.

Together, they create financial loss, operational disruption and customer frustration. For an industry already operating on tight margins, fraud is a significant issue. It directly affects profitability, planning, accuracy and trust. These pressures intensify during peak travel periods when bookings surge, aircrafts are full, and payment activity is at its highest levels.

The global travel sector is estimated to lose more than $25bn to fraud each year, with aviation accounting for up to $1bn of that total. These losses do not exist in isolation. They influence ticket pricing, fees, and investment in customer service, technology and reliability. This makes fraud prevention not just a security concern, but a critical business priority.

Structural weaknesses in airline payments

Inflight fraud
As airlines move away from cash and expand onboard retail and digital services, inflight payments have become an increasingly attractive target for fraudsters. It is estimated that up to 8% of inflight sales may involve fraudulent transactions – significant exposure for any carrier.

The vulnerability lies in how inflight payments are processed. Most onboard systems operate offline, storing transactions until the aircraft comes back online at its destination. This delay creates a window where fraudulent purchases can be completed and goods removed from the aircraft before the card can be authorised.

Organised fraud groups are well aware of this opportunity. Stolen card details are often tested with small purchases before escalating to higher value items, with the offline environment providing protection against immediate detection. As inflight connectivity and retail offering expands, so too does the risk.

Booking fraud
Booking fraud exploits the systems airlines rely on to forecast demand and allocate resources. Criminals block seats, use bots to imitate genuine customers, or place speculative bookings with no intention of travelling. Individually these actions may seem minor, but at scale they distort the data that underpins commercial decisions.

Airlines depend on booking signals to determine pricing, schedule aircrafts, assign crews, and plan catering and inflight inventory. When false demand enters the system, airlines may overestimate interest on certain routes, misprice tickets, or deploy staff and aircraft inefficiently. The result is higher operating costs, reduced load factors, and missed revenue opportunities elsewhere in the network.

Loyalty programmes are also a frequent target. Fraudsters use stolen or fake accounts to accumulate miles and points, which can then be redeemed or sold on secondary markets. This undermines programme integrity, inflates redemption costs, and weakens one of the airline’s most important customer retention tools.

The financial impact is substantial. Estimates suggest the average cost of a fraudulent airline booking is around $2,000, far higher than a legitimate reservation. When multiplied across cases, these inflated costs quickly become a significant risk, creating a direct threat to revenue, pricing accuracy, and operational efficiency.

The impact on airlines and passengers

Inflight fraud
Inflight fraud drives up chargebacks and processing costs while placing strain on relationships with payment providers. Over time, this can result in tighter controls, higher fees, or reduced flexibility for airlines.

There is also a trust cost. If passengers perceive onboard payments as insecure, confidence erodes and repeat business may be affected. To offset losses, airlines may be forced to raise prices or introduce additional fees, further impacting the customer experience.

Research suggests that fraud can account for more than 1% of an airline’s total revenue. For an industry where profit margins are often measured in low single digits, that level of loss can eliminate a significant share of profitability.

Booking fraud

Booking fraud results in wasted capacity and lost revenue. Seats appear unavailable when they are not, deterring genuine customers and resulting in half empty flights. Cost per seat rises, route profitability weakens, and planning becomes less reliable.

Operational knock-on effects are significant. Staffing levels, catering, seating allocations, and projected inflight revenue are all based on booking data that fraud can distort. Airlines then incur further cost investigating and resolving fraudulent transactions. With more than three quarters of companies reporting fraud in the past year, the issue is widespread and growing.

Rethinking prevention, not just recovery

Traditional fraud controls are largely reactive, identifying problems only after transactions fail or chargebacks are raised. Increasingly, airlines are looking to shift fraud prevention earlier in the payment journey, reducing exposure before losses occur rather than recovering them after the fact.

Card present payments in situations that have historically been treated as remote transactions require the customer to actively authenticate using their physical card and PIN. Verification can take place at the point of purchase, even when onboard systems are operating offline.

For inflight payments, this typically involves the passenger using their own connected device to complete authentication in real time. This removes the delay between purchase and approval that fraudsters rely on, closing the gap that allows goods to be taken before a transaction is confirmed.

In many markets, card present, EMV and PIN transactions also shift liability away from the airline, reducing financial exposure when fraud does occur. More broadly, earlier verification allows issuers to identify and stop suspicious activity immediately, rather than after losses have already been absorbed.

A runway for safer payments

Inflight and booking fraud are especially damaging during peak travel times when flights are full and operational tolerance is low. UATP data shows that fraud attempts often rise during these periods, placing additional strain on staff, systems, and customer trust.

Addressing this challenge requires airlines to think about how payments and fraud prevention fit into their wider commercial strategy. Reactive controls alone are no longer sufficient. Indeed, preventative, real time payment security approaches that can scale during peak demand without adding friction for customers are essential. Tools such as card present over internet transactions enable earlier intervention, reducing losses before they occur rather than recovering them later.

Stronger payment protection is not just about compliance. It helps protect peak season revenue, supports more accurate planning, and preserves the passenger experience at moments when expectations are highest. Airlines that modernise how they manage payments and fraud will be better positioned to protect margins, gain a competitive edge and maintain trust when it matters most.