Oct 17

Airfare Insurance

Tag: UncategorizedValeria Weber @ 9:29 am

Farecast, an Internet start-up that made some noise last year by predicting ticket prices for air travelers, is taking their predictions a step further. The Internet site will begin offering one-week fare guarantees for a fee of $10.

Analysts said that many consumers could embrace this apparently novel idea, since it helps take much of the risk out of a marketplace that is notorious for its volatility. “You’ve got to give them credit,” said an online travel analyst with Forrester Research, a technology consultancy. “To my knowledge there’s nobody else out there offering you an insurance policy for airfare.”

With Fare Guard, users search for airfares as they would on most other travel sites. But alongside the fare results, Farecast displays a graphic showing the likelihood that each fare will increase in the coming week. Farecast’s technology sifts through billions of historical fare searches and considers factors like seasonal demand to predict price fluctuations.

Before clicking through to an airline or travel agency Web site to buy the ticket, users are given the chance to buy insurance, which will cost $3 a ticket until Feb. 1. The consumer merely reserves the flight at the current price. If the price rises before he books the flight, though, Farecast will refund the difference. Farecast will offer the Fare Guard service only on about half of the fares it displays.

Sites run by airlines and travel agencies typically offer a 24-hour reservation period, during which time customers can lock in a ticket price. Fare Guard adds six days to that lock-in period, backed by Farecast instead of the originating site. Farecast can afford to take that risk, according to Hugh Crean, the company’s chief executive, because its fare predictions are correct at least 70 percent of the time.

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3 Responses to “Airfare Insurance”

  1. Linda says:

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