Allegiant Air is considering raising fares on customers even after they purchase tickets, and a new industry group doesn’t like it.
The carrier last month disclosed the pricing concept in a letter to the U.S. Department of Transportation, which is considering a blanket ban on post-purchase air ticket price hikes. That ban could be part of a set of proposed DOT rules meant to enhance airline passenger protections. Those regulations are expected to be finalized next month. [more]
A group called AirlinePassengers.org this week shared with DOT its opposition to Allegiant's plan.
Here's how Allegiant, which wants DOT to omit the ban in the final regs, explained the concept in the letter to Transportation Secretary Ray LaHood: "Allegiant is considering a new pricing option for use on its website: when making a purchase, consumers 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. This would be a non-compulsory alternative for consumers; it would provide them another option for potential substantial savings on their trip costs and would be clearly disclosed and explained prior to any purchase."
It remains to be seen whether airline passengers would embrace such an option (Allegiant serves Las Vegas, so it has at least a few gamblers among its clientele). However, AirlinePassengers.org, whose namesake URL wasn't working at the time of posting, is not a fan.
"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," according to a letter sent this week to LaHood from Washington, D.C.-based travel industry lawyer and AirlinePassengers.org director Burt Rubin, formerly American Society of Travel Agents general counsel and special counsel to FlyersRights.org. "Well-run businesses throughout the economy recognize that there are certain, inherent risks in operations, often including commodity price increases. Fuel price increases is one such risk constantly faced by airlines. Well-run airlines can, and often do, address these uncertainties by employing hedging and other strategies to protect against the uncertainty of future fuel price increases. The average customer has no such opportunity."
AirlinePassengers.org told LaHood that it is "a newly chartered, non-profit organization" that intends to act as "the voice for airline passenger rights." It explained that it is chartered in Virginia and has requested that the Internal Revenue Service classify it as a section 501(c)3 educational organization. It provided no additional information on members or funding sources.
Though AirlinePassengers.org is the only organization to publicly comment to DOT on Allegiant's plan, the Global Business Travel Association and the American Society of Travel Agents also supported the proposal to ban post-purchase price increases, according to comments filed with DOT last year.
Not everyone is opposed.
The Cranky Flier today embraced Allegiant's idea.