Allegiant Air Looks at Fuel-Based Airfare
The price of fuel is on the rise, causing airlines to come up with creative ways to save money. Low-cost carrier Allegiant Air is looking into offering an adjustable airfare based on fuel prices, according to a filing with the Department of Transportation (DOT).
Under the proposed changes, the airline would offer a locked-in airfare but also a lower fare that could fluctuate based on the price of fuel.
With the fluctuating airfare the passenger is basically betting on oil prices. After purchasing the ticket, a passenger's overall cost, "could increase depending on changes in the fuel price between the booking and travel dates," Allegiant says in the filing. The increase would have a maximum that would be clearly disclosed.
Allegiant spokeswoman Sabrina LoPicollo tells AOL Travel News that the filing was proposed to increase fare flexibility, but she offered no further details.
Consumer group Airline Passengers opines in reponse to the filing that carriers should take the risk when it comes to fuel costs, not the passengers. "What Allegiant Air is proposing is simply a mechanism for off-loading the normal airline business risk of fuel price increases onto the consumer, where it does not belong," the organization says in a letter sent to the DOT. "Well-run businesses throughout the economy recognize that there are certain, inherent risks in operations, often including commodity price increases."
Michael Miller, vice president of strategy at the Washington-based American Aviation Institute, tells the consumer travel blog Elliot.org that even if the government were to green-light tickets with fluctuating fares it would have difficulty monitoring them.
Are other carriers looking at similar concepts? Southwest Airlines for one says it currently has no plans to look into such fares. "When [passengers] purchase a ticket on Southwest, they're predictably going to get the value out of the fare they've paid, no surprises," says spokesman Brad Hawkins.
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