MasterCard PriceAssure offers travelers new airfare-tracking service

Buying an airline ticket is easily one of the most confusing and costly purchases a traveler can make. There are many questions: Is the price found online the best price? Could the price go down? What does it cost to re-book the ticket if things change?

MasterCard cardholders now have a new airfare tracking tool, called PriceAssure, that may provide some assistance. What is it and should you give it a try? We investigate below.

Eligibility
Anyone with a MasterCard and a existing flight registration on any of big domestic carriers (American, Delta, United, US Airways and JetBlue were all listed when we checked) are all eligible to use the service. At this point, PriceAssure doesn’t cover international airfares.

How it Works
To start, new users need to enroll in the program by providing their basic MasterCard card details, name and an account login. After login, users have a couple options: The first is to input an existing flight itinerary and the price paid for the ticket. Gadling Labs tried out an upcoming flight that we’re taking on American Airlines from LaGuardia to O’Hare.

Once the flights are in the system, PriceAssure goes to work. It constantly monitors the current fare on your airline for the chosen dates. Should that price fall below the price you originally paid for your ticket, PriceAssure sends out an email, letting you know that you may be eligible for a refund. Interestingly enough, PriceAssure also incorporates any potential change fee you might have pay as part of the new re-booking price.

All of this, mind you, is based on the type of ticket that you have booked and what the rules are for changing that ticket (and the fees therein). If one is booked on a heavily discounted ticket with high change fees, for example, a $20 fare drop won’t account for the $150 in change fees so a refund is moot. But for a more flexible ticket or a larger price drop, the service is particularly handy.

Once you discover you’re eligible for a refund, MasterCard also offers to call up the airline for you to negotiate your refund for $19.95. You can make the call yourself for no additional charge (though the hold time and haggling with the customer service rep is up to you).
Our Take
With all the variables involved in booking airfare these days, any solution that claims to simplify the process is already a thumbs up in our book. That said, PriceAssure is likely to work best for certain certain types of travelers more than others.

If you’re a budget traveler, chances are you’re already buying heavily discounted airfares and the likelihood your fare will fall enough to save you more money is slim. Even if the price on your flight does fall, it’s not likely to be enough to offset the often hefty airline change fees attached to most deep discount tickets.

Business travelers, however, play a different game. Many of these passengers book more flexible, high-cost airfares, and for these itineraries, PriceAssure will prove quite useful. Take a test drive of the application over at priceassure.mastercard.com

Spring Break deals: Fares up overall, best deals can be found to Florida, Europe

The folks over at Bing Travel have been studying up on 2011 Spring Break airfare, and we hate to break it to you, but they’ve found that the average airfare cost is up more than 10 percent over last year, to $489. But the airfare increase doesn’t have to stop the beach party. If you choose wisely, there are still plenty of Spring Break deals to be had.

Bing’s Spring Break Travel Forecast says that lower fares on flights to Florida (particularly Fort Lauderdale, Jacksonville, Miami, Orlando and Tampa) can still be found. The average fare for Boston to Jacksonville is $233, and you can fly from San Francisco to Tampa for $300.

And while many overseas airfares have risen since last year, average airfares from several U.S. cities to Paris, Amsterdam and Rome have dropped as much as 13 percent over Spring Break season fares in 2010.

If you are just settling into spring break planning mode, here are some tips from Bing on finding the best spring break deals:

  • Be Flexible. Now we would never suggest skipping a day of classes, but, ahem, you will do better on airfare if you’re not trying to travel on weekend days like your Spring Break brethren. Monday to Monday or Tuesday to Tuesday fares will almost always be better. And if a school schedule isn’t determining when you vacation this spring, you will likely save money by going at the beginning of March or April rather than the middle of either month.
  • Use Online Tools. You can monitor your airfares and get notices when they drop on a certain route from a number of different online services. Bing’s Price Predictor shows you whether airfares on your chosen route and dates are rising or falling, to help you decide when to buy.
  • Be Aware of Hidden Fees. Be sure you know what you will be charged for checked baggage, overweight luggage, aisle or exit row seats before you hit the airport.

Bing is giving away five $100 travel stipends for 2011 spring break travel on Twitter. To enter, tweet @fareologist with where you’d like to go for spring break. Check out the contest’s official rules before entering.

[Image credit: Flickr user Dawn Huczek]

Which BIG airline just pulled out of three booking sites?

As you’ve read here on Gadling, the battle between airlines and online travel agencies is poised to heat up. For the past few years, a dismal economy has sent many bargain-hunters to online travel sites with the hopes of finding fantastic deals and minimizing the pain in their wallets. Yet, with the travel market and the broader economy showing signs of recovery, airlines‘ brand power will gain momentum, and customers with more cash at their disposal will favor convenience and recognition over saving a couple of dollars. A battle for your money and your loyalty is brewing.

And, it’s just intensified.

Last month, American Airlines and Orbitz tangled over fees and the booking process, with the airline threatening to yank its inventory from the travel site, a threat on which it made good. After a temporary restraining order was issued, a judge ruled yesterday that American could pull its inventory from the online travel agency and ordered Orbitz to stop selling American Airlines tickets and displaying its fares.

Now, Delta‘s getting in on the action.

The airline has yanked its inventory from a handful of smaller online travel agencies, Aviation Week reports, including CheapOair, OneTravel and Bookit as of last Friday. So, if you’re hunting for cheap tickets on these sites, you won’t run into Delta any more. Aviation Week observes that it appears to be “part of a partial shift in its distribution strategy,” and notes that it seems different from American’s move with Orbitz.For Delta, the decision looks like it’s part of an effort to consolidate around larger online travel agencies, while American is targeting agencies directly, rather than using an intermediary to reach another intermediary.

While the means may be different, the objective appears to be the same. With a shift in the economy, airlines have a bolstered position in the marketplace, and this is likely to give them a bit more weight in dealing with online travel agencies and in reaching consumers directly. For American, it seems like a play to reduce costs and increase efficiency – as it is for Delta (though through different means). Ultimately, however, Delta wants more direct action from consumers, which reduces its sales costs and increases profits, which is what differentiates its decision from that of American.

According to a statement by Delta in Aviation Week, “Delta is being more selective in our use of online travel sites in the future as we continually work to improve our online distribution strategy.” The company adds, “We continue to make significant investments in delta.com to make it an industry-leading travel site, and we believe that delta.com will become the preferred online site to book travel on Delta.”

A representative from CheapOair was not available for comment.

I asked Douglas Quinby, Sr. Director, Research, at travel industry research firm PhoCusWright, his thoughts on Delta’s decision, and his reply was pretty striaghtforward: “The only surprising thing about this move is that it has taken this long.” He explained, “U.S. airlines have impressively restrained their appetite for growth (i.e. capacity) on the back of a (more or less) recovering economy. With clear control of their inventory, airlines have already started rationalizing distribution, and the weakest links are first to get snipped. American may have jumped the gun a bit with Orbitz, but believe me – we ain’t see nothin’ yet!”

So, what’s the net effect of all this? Do the actions of Delta and American suggest that we’ll be paying higher fares in the future because of behavior that doesn’t benefit the consumer? My bet is that the average fare buyer won’t see a whole lot of difference, especially given the share of sales already owned by the airlines via their own websites. The infrequent leisure traveler, especially, is losing an alternative … though it’s one that won’t be as important in a recovering economy.

[photo by boeingdreamscape]

Extra airline fees could mean better service! This is the FUTURE

Soon, airlines could make all their profits on the extra fees you pay. Seriously. Yesterday, the Department of Transportation revealed that airlines have had their most profitable year since it started tracking the data back in 2002. And, a good chunk of revenue came from baggage fees, reservation change fees and ancillary fees. In the third quarter alone, it was good for more than $2 billion. So, the foundation is in place. All the airlines need to do is build on it.

And, it looks like some are trying to do that.

According to MSNBC, US Airways President Scott Kirby said that baggage fees and ancillary fees could add up to 100 percent of the airlines profits this year. We’re not talking about some future development, here. This is now. We’ve been talking for a while about how airlines are coming to rely on these fees. Last year, it was an issue of surviving the recession; this year, it’s been about driving profits. Regardless of prevailing economic conditions, it’s clear these fees aren’t going anywhere. It would stand to reason, therefore, that they’d become a larger part of airlines’ profits over time.

But, 100 percent? How would that work? Let’s take a look.First, think about the trend in reduced amenities, putting aside the weird stuff you read about this morning. Food isn’t free, and you’re paying for bags and premium coach seating (think exit row and bulkhead). This lowers airline costs on an available seat mile basis.

Now, what does it mean to lower costs? Well, it provides the elbow room to compete more effectively on fares – translation: cheaper tickets. So, in theory at least, this puts more butts in seats. The lower cost, however, erodes profit per available seat mile, because there isn’t as much revenue assigned to it.

This is where the fees come in.

If all you buy is a seat, you score! You’ll have the chance to get it for less than you would have paid otherwise. If you’re the kind of person who goes to the movies and sneaks in your own snacks, you’re all set. But, the minute you need something else, you’re going to have to pay. This is where the airlines can make their profits. Essentially, getting you into a seat becomes a marketing opportunity for everything you sell. Going back to the movie theater example, it’s equivalent to the previews you see that implore you to go out to the lobby and grab some popcorn. And, they can pump up the prices on food, liquor, bag-checking and so on to make up what they’re effectively giving away on a break-even seat.

Of course, this is a bit oversimplified, but you get the idea. The future of airlines may be to turn a cheap seat into an opportunity to up-sell you on everything else. Frankly, it isn’t a bad idea. In addition to making tickets cheaper, the flight attendants will need to sell in order to help the airline turn a profit. Sales without service is usually a fool’s errand, so a shift in strategy of this sort will lead to better passenger treatment. Maybe we’ll actually be treated like customers!

All these extra fees may not be such a bad idea after all. The airlines don’t realize this, but if they make all their money on the amenities, they’ll actually have to deliver an enjoyable experience.

Let’s pay less to pay extra and be treated like human beings in the process.

[photo by Augapfel via Flickr]

How much are you really paying for your plane ticket?

We’ve heard airline employees gripe ad nauseam about how flying just isn’t what it used to be … because it’s so much cheaper than it was back in the glory days. True, we’re looking at a much different world post-regulation, but that was so long ago that it isn’t relevant any more.

So, what about today? Are airlines still getting hammered in the deal (as they contend), or are consumers giving ’til it hurts? The answer, of course, is somewhere in the middle.

You probably saw my story this week that puts plane tickets up 13.1 percent year over year for the second quarter, though it really just offsets a 13 percent decline last year. Nonetheless, the $341 average domestic fare is close to the 2008 peak of $346 and the third-highest average domestic fare attained since 1995 (2006 came in second at $342). It really does feel like we’re getting screwed.

Think again. Airline employees have a point, but only narrowly.


Adjusted to 1995-equivalent dollars, the average domestic fare this year is only $238. That’s a 20 percent drop from the $297 average fare in 1995. Over the past 15 years, the airline industry has lost a lot of ground. The peak, in 1995-equivalent dollars, was reached in 1999 ($302) and maintained in 2000 ($300) before the slide began. Even in this analysis, however, 2010 shows a marked improvement from the 2009 level of $213 (in 1995-equivalent dollars).

So, in pure cash, the airlines have been getting shafted. The industry’s position falls apart, however, when you consider the inclusion of ancillary fees, which are expected to be good for $8.9 billion in airline profits this year, according to IATA. The inflation-adjusted fare we’re paying doesn’t include the amenities we used to receive … and the airlines are generating extra income from what they used to include in the price of a ticket.

There’s no doubt that airfare is cheaper than it’s been in at least a decade and a half, but you’re not getting the value you used to.

[photo by Mr. T in DC]