Listen weekdays from 1-3pm ET
(No audio? Try our help)
Recent shows | More media

Listen Live: Mon-Fri 1-3pm ET

Posted: 6:00 a.m. Thursday, Nov. 8, 2012

Allegiant to sell floating rate tix based on fuel prices?



By Clark Howard


When is the price of an airline ticket not the price? One discount airline wants to charge you more after you buy -- or reduce the price of your ticket -- based on one factor that's completely out of your control.

Allegiant Air has petitioned the feds to assess a fuel surcharge on all tickets based on the going price of jet fuel at that time that you fly.

The idea of this floating rate ticket is that you pay a base price for a seat, but a variable price for kerosene.

Let's say you book six weeks out before your travels. If the price of kerosene goes down at the time you fly, you'll get a partial refund on what you paid. But if kerosene goes up, the price of your ticket goes up.

I can't imagine people being excited about speculating on the price of a barrel of oil. As for me, I think it's kind of cool, but I know I’d burn up a lot of time looking at oil futures contracts trying to figure out which way prices are headed and when's the best time to buy!

Interestingly, what Allegiant wants to do already happens with logistics companies like FedEx and UPS. There’s a fuel surcharge when I ship a package. But the idea of doing this with airplane seats? Even if I think it’s cool, even if the feds allow it, I think it will bomb in the marketplace.

Vacationers want to know they paid what they paid, no more and no less.