Model of an Allegiant Boeing 757 located behind Allegiant CEO's cubicle at their headquarters in Las Vegas.

Model of an Allegiant Boeing 757 located behind Allegiant CEO's cubicle at their headquarters in Las Vegas.

Dan Webb on his blog, Things in the Sky, wrote up a story about Allegiant looking to possibly offer a new type of fare that changes with the cost of fuel.

In a filing to the Department of Transportation, Allegiant wants to have the option of offering a fare that could fluctuate based on the price of oil. This would mean you could buy a ticket for uber cheap now and then possibly have to pay more later if the price of oil goes up. This fare option would be in addition to their regular fares.

Is this crazy? Maybe, but again maybe not. Determining the price of fuel is a huge part of running an airline. Passengers will purchase tickets months in advance (especially leisure fliers, that Allegiant caters to) and there is no telling what the price of fuel will be when the flight actually happens. If airlines charge too little for tickets, they could end up losing money for that flight.

This new fare options, allows passengers to gamble on their airfare, which makes sense for the Las Vegas based airline. The big problem is, are most passengers savvy enough to understand the fuel-fare? And who would regulate that Allegiant would be raising fares properly based on fuel costs?

This could be taking the ala cart airline fees to the next level. Brett Snyder via BNET recently took a look how the traditional low cost carriers are growing and becoming more traditional. This leaves room for airlines like Allegiant to come up with creative ideas on how to add additional fees and revenue. People complained loudly when Spirit announced carry-on fees, but their low fares and fees have been very successful for them. Passengers seem to complain, but when faced with the option, they love the low fares and fees.

Even when I flew Allegiant, I got a bit overwhelmed by all the fees, but I flew for much cheaper than on any other airline — by quite a bit. Could fuel price-sharing be the future of ultra low cost carriers? Who knows, but Allegiant wants to be prepared if it is.

To see quotes from Allegiant and Southwest Airlines on this issue, check out my story on AOL Travel News.

EDITOR-IN-CHIEF & FOUNDER - SEATTLE, WA. David has written, consulted, and presented on multiple topics relating to airlines and travel since 2008. He has been quoted and written for a number of news organizations, including BBC, CNN, NBC News, Bloomberg, and others. He is passionate about sharing the complexities, the benefits, and the fun stuff of the airline business. Email me: [email protected]

http://www.airlinereporter.com
Slip and Slide. Video of an SAS Boeing 737 Sliding on the Ice
9 Comments

One of the more ingenious ideas the airlines to use to generate traffic, and cut the customers some slack, is a fare with a “dress code”, a decrease of the base air fare if passengers dress in at least business attire. It brings some old fashioned class back into air travel.

Ha! I love that idea.

Really, with airfares being so low, it allows all types on board the aircraft and one of the reasons I think we see so many incidents (hope that doesn’t sound too harsh).

David

Does’nt sound too harsh at all, I agree..Something has to start regulating the passengers attitudes and have respect for the other passengers, as well as the flight and cabin crews. The party starts after you arrive, not before or during the trip.

cedarglen

And the obvious question, not addressed in the article is: If fuel prices have dropped between purchase and flight date, does the airline provide a similar refund? In my view, fuel surcharges, even creative ones as is proposed here are OK. That said, it is a two-way street. -Craig

Rob Goodman

So if approved you the customer will be paying a fee to make a reservation, than say 30 days before your flight pay for your trip.

Gee if DOT gives its blessing do you think anyone else would do this? I’m surprised that Ryanair doesn’t do this yet.

Maybe the local restaurant’s can do this too. Make a $50 deposit on your reservation for your Friday night dinner. Then if you don’t show they keep the $50.00 You show up they credit you say $25.00 towards your meal.

Well, think of sporting events and movies. There are lots of things that require a down payment and if you don’t show, you lose the money.

David

I hope with this gamble fare, that if the price of fuel drops, they really do follow through and give you a refund in the form of CASH, not some useless “airline credit”….but this is an airline that should be called Ancillary Airlines. They’ll consider the credit to you cash, but if you don’t want it, they’ll just keep it.

From the letter:

“That lower fare could be reduced further or could increase”

No word on how that lower fare would work. And the the key word to me is “could”

Leave a Reply

Your email address will not be published. Required fields are marked *