You know what they say about Las Vegas: "What happens here, stays here."
That, of course, is a reference to all kinds of unmentionable "fun" to be had in Sin City, but let's assume some of the fun includes placing outrageous bets. Well, brace yourself: such gambling could go mainstream if a Vegas-based airline has its way.
You see, Allegiant Airlines is considering asking passengers to bet on the price of their tickets.
I know St. Patrick's Day is this week, but you may need more than the luck of the Irish for this Allegiant scheme to work for you.
On the other hand, you could win big (and get some cash back). You could also lose big. A better alternative might be to weigh passengers and charge by the pound. Yes, we'll get into that, too.
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In case you're not familiar with Allegiant Air, it's a discount carrier headquartered in Las Vegas that focuses on leisure travelers heading to warm weather destinations like Myrtle Beach, S.C., Orlando, Fla., and Phoenix. Because it doesn't have many high-paying business travelers, it doesn't have many frills. And like all of today's cost-conscious airlines, the rising price of oil has hit it hard.
So, how about a gamble?
The airline has suggested (and this has yet to be OK'ed by anyone, most notably the government) that passengers choose between a "normal" ticket with a fixed price, or gamble on a "variable" ticket. With a variable, passengers would pay one price, but if the cost of jet fuel dropped by the departure date, the passenger would get cash back. However, if the price goes up, passengers would pay more (up to a certain limit, anyway).
It reminds me a little of Continental's recent FareLock innovation, which allows you to book a flight and, for a fee starting at $9, hold that reservation at the locked-in fare for as long as a week. If prices go up, you're golden. If prices go down, you can cancel your FareLock reservation without paying the steep change fee (though you do lose the nine bucks or whatever you're charged).
But back to Allegiant: would such a plan force us to turn into oil price day traders just to score a cheap ticket? And how many of us are actually good at gambling, anyway?
When it comes to the fluctuations in the volatile oil market, we know the professionals don't always get it right. In fact sometimes they're disastrously wrong.
Remember the summer of 2008, when oil was just a whisper away from $150 per barrel? By then, Goldman Sachs had come out with a report predicting it could go as high as $200.
Prudent passengers bought their Thanksgiving and Christmas airfare way ahead of time, only to see oil come crashing down and holiday airfares offered at bargain bin rates. I can still hear the wailing from "smart" travelers who bought early, and yet it did seem smart, at the time.
I bet it seemed smart last September when the Business Insider site noted that US Airways was not hedging fuel, prompting the reporter to ask if the airline "know[s] something we don't know about fuel demand in 2011?" Uh…apparently not.
On the flip side, Bloomberg reports that for this quarter alone, United has 63 percent of its fuel needs hedged. Delta has 49 percent and Virgin America has a whopping 80 percent.