Tired of having to book non-refundable airline tickets within seconds or lose the low fare? Now you can buy a 7 day insurance policy for the lowest fare.
You input the chosen route and the dates of travel and Farecast gives you a prediction to buy now or neutral or wait if they expect fares to decrease for your travel dates in the next 7 days. If you pay them $9.95 they will guarantee that you will receive the lowest fare if you purchase within 7 days. If you buy their protection and purchase the ticket for the same route and schedule and receive a higher fare then their prediction, they will reimburse you for up to $200 to cover the difference between the guaranteed low fare and the current low fare.
This is truly the most innovative airline ticketing service I’ve seen. Although only time will tell if their algorithms are accurate or if they go broke.
First, they should target this to the Wall Street types, traders will love it. Of course they might find a way to beat the system (but maybe that will help Farecast perfect the service). Traders would buy price guarantees and then find some way to arbitrage them.
Assuming that Farecast’s algorithm works, this could be a great story to tell. However my biggest problem with Farecast is that the airlines will hate them and make changes which could challenge Farecast’s algorithm to keep pace.
The airlines hate competing on price yet they find themselves trapped to do so. Numerous automated online services have been created to help consumers get the lowest airfare. Airlines hate this since they are trying to maximize their revenue per mile not help consumers pay the least.
Farecast needs to find a way to get the airlines to embrace them. None of the services (ie:Kayak etc) have tried to work with the airlines.
I believe that, if Farecast and the others don’t find a way to work with the airlines instead of trying to exploit the airline’s pricing weaknesses, over time the airlines will find a way to thwart or substantially interrupt the efforts of all the automated price searchers.