Nevada-based Allegiant Air has written a letter to the Department of Transportation stating its intention to introduce a new whole new meaning to the definition of a flexible ticket:
When making a purchase, consumer would be able to choose between a traditional "locked in" fare that would not fluctuate, and a lower fare that could change before the date of travel. That lower fare could be reduced further or could increase (up to a set maximum that would be clearly disclosed) depending on changes in fuel price between the booking and travel dates.
Theoretically, this type of fare could save you money if you buy at a cheap price and oil drops further. But let's be realistic: how likely is it that an airline is ever going to refund money if their costs drop?
I would think such a program would be a logistical nightmare. How are additional costs processed? Couldn't a consumer just cancel his credit card after purchasing a ticket? Would the airline deny consumers both boarding and a refund if they purchased one of these tickets and refused to pay up when fuel prices climb higher?
And just how would it be determined whether a fare increase is applicable or not? Would there be any sort of accountability other than a price ceiling? I might be a bit more comfortable if the airline published clear benchmarks stating if oil reaches this price, the fare will go up this much.
Charter airlines have tried this model before, but Allegiant would be the first U.S. commercial carrier to offer such a pricing structure. If they succeed, might we ever it see it on the majors? It will all depend on the specifics, but with the way American Airlines is re-inventing the airline booking process, I cannot say that I would be surprised.