An airline ticket with a fluctuating price?

Allegiant is proposing to offer the option of a lower-cost ticket that could change in price depending on the cost of fuel.

By Karen Datko Feb 28, 2011 8:22PM

Given a choice between two types of airlines tickets, which would you pick?

  • A ticket with a fixed price.
  • A cheaper ticket with a price that could increase by the time you fly if the cost of jet fuel goes up.

It's a new proposal that would inevitably confuse airline customers if it comes to pass. Here's how Allegiant Air's plan would work:

If you buy the ticket with the fluctuating price, rather than the fixed-price fare, the airfare could go down if the cost of fuel drops by the time you depart. Or it could increase -- but not by more than a set maximum. Post continues after video.

Other airlines -- facing higher fuel prices and lower profits -- will probably think this is a good idea. From Christopher Elliott's blog:

"It's easy to understand how airlines can rationalize this," says Edward Hasbrouck, a consumer advocate and author of "The Practical Nomad: How to Travel Around the World." "They want more money, and they want to shift the risk of fuel price increases to passengers."

At last count, 79% of readers who voted in Elliott's poll on whether the proposed fluctuating fare is "ridiculous" picked "yes."

Elliott and others raise several issues, including:

  • Who would police this deal? The government wouldn't, so you'd have to feel confident that the airline is being honest.
  • This requires normal people to understand and predict fuel pricing. Isn't pricing already confusing enough, with peak travel fees and all the other ways we're nickel-and-dimed by the airlines?

The Star-Telegram of Fort Worth reports: "Jet fuel spot prices have jumped 19% in just the past two months, and with continued political unrest in the Middle East and elsewhere, industry analysts can only guess how much higher the prices will go." U.S. airlines have already raised prices five times this year.

Dan Webb, writing at Things in the Sky, said Allegiant's idea has some merit:

Every year, my family decides if it's worth pre-buying heating oil for the winter, or just rolling the dice with market prices. How is this any different? As long as Allegiant (or any airline considering something similar) fully explains this new fare option to its passengers to the time of booking, I don't see any issues.

Greg Gross at I'm Black and I Travel! had another view:

This adjustable-rate ticket will definitely appeal to the gamblers out there among us -- and should something actually cause fuel prices to fall noticeably, you might experience the rare joy of getting money back from an airline.
Realistically, though, how likely is that to happen?
Put it another way: Would Allegiant be proposing this knowing it was going to end up costing them money?

What do you think? Would you take a chance on a fluctuating ticket price?

 

More from MSN Money:

VIDEO ON MSN MONEY

3Comments
Mar 1, 2011 11:28AM
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never buy a product without knowing the full price up front
Mar 1, 2011 12:34AM
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Actually, the analogy I was thinking of was an adjustable rate mortgage.  We see how good of an idea that was for a lot of people.
May 9, 2011 8:45AM
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i am look ing at the same ticket in april and in august and the price has doubled-

c'mon man-fuel prices have not gone up that much

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