Wednesday, October 12, 2005

Back Up Flights for a Small Fee

Gridskipper reports that American Airlines has announced a sideline service that allows you to hedge your bet on booking a flight.

Flights: Airfare Backups
American Airlines is now offering an innaresting new sideline service. For a $25 fee, you may reserve another seat within three hours of any fare you've already purchased. This gives you the flexibility to depart earlier or later than originally planned without having to pay the higher change fees, and it also gives you leverage in case of flight cancellations or overbookings during high-traffic periods. Seems like a no-brainer in retrospect, and should provide a tidy little extra revenue stream for the airline.

I’m really trying to figure out who thought this was a good idea, and how it’s going to help travelers. Can it be that I’m the only one thinking this is going to exacerbate an already difficult situation?

The number of available fares on any one particular flight is already cumbersome and difficult to understand. Are you ever able to book that super low fare when you really want to travel? It seems like every person pays a different price for their ticket.

The information about the program said that the service is available on all fares, if there are eligible seats on the flight. So I guest the first question is just how many of these sideline fares are going to be available on any given flight?

And what is this going to do to the practice of overbooking? If you are reserving a seat on three different flights (the one you want to travel on, one three hours earlier, and one three hours later), you are taking at least two seats out of inventory that are never going to be used. Those are two seats that someone else could be purchasing at a reasonable cost. Now that the limited inventory is all that is available, the pricing goes up. The basic laws of supply and demand at work in the airline industry, but in this case, it’s an artificial inventory level.

And isn’t overbooking what leads to all the problems with getting on your originally scheduled flight during peak travel times anyway? So the airlines will charge you a little extra so that they can continue to cause problems for you anyway.

I know that airlines are looking at creative ways to increase their revenue without raising ticket prices. While being upfront and raising fares $5 or $10 may be difficult, at least it’s honest. This backdoor way of increasing ticket prices (by artificially decreasing inventory of low-priced seats) just seems dishonest.


Anonymous said...

You are right. This will certainly add to the problem of overbooking flights. I don't see any way around it. As a consumer though, it seems like I could book a discount fare on a non-peak flight and then purchase the $25 "hedge" to get a seat on a peak time flight. Hmmm...?

Fly Girl said...

As a consumer, IF you could book a discount fare and then hedge it to a peak time, it might seem like a good deal. BUT -- do you really think you are going to be able to do that? I'm thinking --- NO!

What I see happening is there being lots of hedge seats available on lesser booked flights as a way of moving travelers onto those flights.

While that might not necessarily be bad, it just seems this whole approach is to see you nothing for something.

Why not just run the airline on a solid business model.

Anonymous said...

Geeze! That sounds like every (airline employee) commuter's nightmare! Even if the flight looks open, it could fill up :P

I think american carriers should just dump the advance purchase, Sat. night stay and other pricing bullsh*t and adopt an LLC fare structure like Air Canada did.

-Queen of Sky