Allegiant floats novel idea for fares linked to to fuel price

Here's an imaginative way of dealing with the volatility of fuel costs reportedly being floated by US low-cost carrier Allegiant Air. Appropriately enough for a carrier based in the gaming capital Las Vegas, it suggests giving passengers the option to buy a ticket where the final fare would be tied to the price of aviation fuel, according to US newspaper reports. If the fuel cost rises you pay more, if it falls, you get money back. While Allegient says it has no specific plans to implement the initiative, it raised the possibility as part of correspondance with the US DOT over airfare rules. Here's an extract from the Las Vegas Review Journal on the story - read the  article in full here and a piece on it from the Seattle Times here.

In a letter concerning possible airfare disclosure rules proposed by the U.S. Department of Transportation, Allegiant Chairman and CEO Maurice Gallagher Jr. wrote that the Las Vegas-based airline was considering giving customers a choice on its website: a traditional fixed fare or a discounted one that would fluctuate with the price of aviation fuel. If fuel prices rose between the date of the ticket purchase and departure, the passenger would pay the difference up to a set maximum. But falling prices would net them a refund for the spread.

Company spokeswoman Sabrina LoPiccolo said there were "no immediate plans" to implement this approach or even establish thresholds about when to go ahead.