FareLock: Fare or Unfare?

By | December 14, 2010

SAN FRANCISCO - JANUARY 21: A traveler stands...

Airlines are making their profits in fees of late, as opposed to fares. So we are resigned to the fact that fees are here to stay, and what we hope is that these fees at least are value-added instead of merely charging for a service that was once included.

Continental Airlines is introducing a service called Farelock, which will be available when booking reservations on their website. Continental has long offered a 24 hour flexible hold, during which changes and cancellations are permitted without penalty. This is mirrored by many major carriers.

It is particularly interesting they are introducing this now. One would think that they wouldn’t launch any such initiatives during their merger with United. The new service will allow passengers to hold prices without payment for a fee beginning at $5 for a 72-hour hold and $9 for a 7 day hold, and varying based on the route, advance purchase, hold length, etc.

We’re not sure how long the 24-hour courtesy hold will stand if other airlines follow Continental. But this could be a value-added service, like insurance, allowing people additional hold time before booking a reservation. That is the danger we’re concerned about, that this will spur the loss of an existing service. Beyond that, we’re not sure Farelock will attract a larger percentage of interest than buying travel insurance. But it should be enough of a percentage to justify the program.

But, to answer the question: Is it fair? It may be. But there are downsides. Continental has the Farelock function enabled on their site, but we were unable to find any details rules and regulations. Will there be exceptions for sale fares, for example? Either way, we suppose it is fair as long as they do not take away the 24 hour policy, and perhaps other airlines will match it, offering more choice…for a fee, but still more choice.

It is high time that airlines looked at the non-refundable nature of airline tickets, the high change fees, and offered ways to mitigate them for customers. While we still think it is ridiculous a change fee could be more than the fare, and the fact you can buy something and get nothing back if you don’t use it, these are largely untapped markets where airlines could look to. What about a fee you could pay in advance that would reduce the change fee on a fare?

But wait…an airline already did that. American introduced Your Choice in June, which allows people to pay an upfront fee which adds several extra features, including the halving of their change fee, with a charge of about $9-$19. It also allows Standing By for an earlier flight that day free of charge, a service that was once free on most carriers, but is now something they charge for. It hasn’t caught on, and it is possible Farelock will remain a niche product for Continental.

What do you think?