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.