If the Department of Transportation OKs the requests of one small no-frills airline, the answer will be yes.
Allegiant Air, a 12-year-old carrier we've written about from time to time, is requesting the right to sell plane tickets that could fluctuate in price based on the rise or fall of oil prices. Normally, a ticket price is locked in from the moment a passenger books a flight. Now, Allegiant wants to be allowed to offer tickets that would be cheaper than the "locked-in" price, but in which passengers could be charged more (or less, in theory) if oil prices change between the time of booking and actual departure.
Allegiant's proposal surfaced earlier this week on Christopher Elliott's blog, which links to the airline's request to the DOT. Here's a passage from the letter explaining how a fluctuating-priced ticket might work:
"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."
So how, exactly, would costs related to oil price fluctuations be passed along or refunded to passengers? Allegiant can't (or won't) say, though it offered some vague comments on the issue to the Wall Street Journal:
"An Allegiant spokeswoman said the company hasn't decided whether it will actually introduce variable pricing. 'We haven't gone far enough down this path to decide how it would work,' she said. The company made its DOT filing in the hope of preserving 'flexibility' and offering 'a different option for consumers,' she said."
Allegiant was one of the first carriers to begin charging for things like checked luggage and seat selection. Now, perhaps, it's at the forefront of a new scheme, in which the cost risks related to oil price fluctuations are directly passed along to passengers as well.
But based on the airline spokesperson's comments, it seems like Allegiant sent the letter to the DOT merely to keep the concept of variable pricing open. The airline might have also sent the letter in order to see what kind of reaction it would get from the public regarding ticket prices that could rise or fall after they've been bought.
Well, what's your reaction?
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