WASHINGTON – A budget airline is floating yet another way to hit customers’ wallets: having them take on the risk that fuel costs will rise between when they buy tickets and when they fly.
Allegiant Travel wants to try giving customers the option of a lower up-front cost if they agree to pay more later in case the cost of jet fuel rises. The airline says customers would pay less if fuel costs dropped.
Allegiant CEO Maurice Gallagher Jr. tells Businessweek he’s willing to take on federal regulations that limit the practice or conform to the requirement that a transaction like it would be structured as a two-part deal.
He says it would take six months to a year before the company could be ready to launch the option, provided regulators give it the green light.
Around the Washington area, Allegiant has flights to Orlando from Hagerstown, Salisbury and Newport News.
The airline collected an average of more than $30 in fees per passenger on top of fares and taxes, according to its most recent financial report.