Skift Take
Whether it's the airline itself or a new startup, trust issues and the complexity of the process are very big hurdles to overcome.
Fliers today can find it difficult to keep their options open while trying to get good seats and locking in a good price, especially with airfares changing often and planes more crowded. Nobody wants to buy a $600 nonrefundable ticket, have their plans fall through and not be able to use it -- or be forced to pay exorbitant fees to change flights.
That's precisely the problem several companies aim to fix by selling, or planning to sell, "options" on airline tickets.
United Airlines offers price lock-in options, while at least three other nonairline companies are starting options services for airfares.
"It could be a value. ... It's kind of like an insurance policy," said George Hobica, president and founder of AirfareWatchdog.com, a fare-alert website.
Airfare options work similarly to a stock option. The seller of the option charges a fee to hold your flight reservation at a certain fare, but you're not obligated to buy a ticket. If your travel plans change, you can simply let the option expire and you've lost only the fee, not the full cost of the plane ticket.
"If you've ever coordinated one of those ski trips or golf vacations with a group of friends, you know you can be the sucker who puts down the $500 for the flight and nobody goes," said Heidi Brown, co-founder of BitBend, a fare lock-in startup in Chicago.
A fare option might work like this: You pay $9 to lock in ticket at a set fare for three days while you get your spouse or friends to commit to a getaway -- or wait for your boss to approve vacation time.
Typically, the longer you hold the fare, the more the option costs. You don't get your fee back, regardless of whether you make the purchase or let the option expire. For option sellers, it's a delicate balance of pricing options low enough to entice consumers, but high enough to make money, considering they may not make the final
