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Airfares Based on Oil Prices Would Confuse Fliers: Travel Editor

Tuesday, 1 Mar 2011 | 3:58 PM ET

If you could purchase a ticket for your next flight for a relatively small sum, with the caveat that the cost could go up or down, based on oil prices, would you do it?

“What I don’t like about it [the concept], it makes buying airfare more confusing,” Gabe Saglie, senior editor at the Internet media company Travelzoo, told CNBC Tuesday about discount airline Allegiant’s proposal to sell tickets that fluctuate in price.

Airfares: The New Oil Hedge?
Is a ticket that lets travelers speculate on energy costs a ridiculous bet? Insight with Gabe Saglie,Travelzoo and Helane Becker, Dahlman Rose.

“It makes it more inconvenient and it puts it on the shoulders of consumers to figure out how oil is going to go. It should be on the shoulders of the airlines.”

Those who take international flights are subject to fuel surcharges, said Helane Becker, airlines analyst for Rose Dahlman & Co., who defended Allegiant’s proposal.

“The international airlines are able to put in fuel surcharges, in addition to the base price of the ticket, whereas the DOT [Department of Transportation] in the United States has required that all US airlines put the oil surcharge in the base of the ticket,” added Becker.

“All Allegiant is asking permission to do is to preserve the right to change ticket prices going forward, if oil prices go up.”

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