Fare Guard – a (bad) option on low airfares

Farecast is one of my favorite sites for checking out airfares. It’s a data junkie’s dream – Farecast does for airfares what Zillow does for real estate data.

You can slice and dice airfare data in a number of different ways. Want to go to San Diego for 3 or 4 days, but don’t care when? Farecast will show you the cheapest dates to start your trip. Want to somewhere for 4 days for under $200? Farecast will show you where you can go.

In addition to the usual information that travel sites provide, Farecast shows you a history of the lowest available fare for your trip. It also provides a forecast of whether fares will go up, down or stay the same.

TechCrunch writes about a new feature called Fare Guard that will lock in the fare that you find. They will reimburse you the difference between the fare that you lock in and the lowest fare on the day you buy your ticket. (Within 7 days.) It’s sort of like an option to buy airfare.

Although it’s not quite as bad a deal as an extended warranty, it’s unlikely to be a good deal:

  • The service is only available on fares that predicted to go down. If you believe their predictions are accurate, you shouldn’t be buying anyway.
  • The fare that is “guarded” is only the lowest possible fare for that date, not for specific flights. There is often a lot of variability in fares from flight to flight (even on the same airline) on the same day. Let’s say your ideal flight is at 5 p.m. and priced at $350 on the day you purchase the service, and that’s the lowest fare for the day. Five days later, the 5 p.m. flight is up to $450, but the lowest priced flight is at 9 a.m. and costs $350. You get nothing and you’re out the $10.
  • Fare Guard doesn’t take into account airline preference. You find a United flight today at $350 and the lowest fare, on US Airways is $325. When you book, the United flight is $500 and the lowest fare on US Airways is still $325. Again, you get nothing.
  • Fare Guard doesn’t allow for airport preference. If you’re in a market with multiple airports like New York, DC, San Francisco or Los Angeles, you have to pick an airport to lock in. Just as with specific flights, fares can vary by hundreds of dollars from one airport to another.
  • The regular price for the service is $9.95 and the maximum possible payout is $200. You’re essentially betting $10 that the price of your flight will increase in the next 7 days. If the fare goes up $25, you’re up $15.05 for the hassle of buying the insurance and filing a claim.

If you care about when you fly or what airline you fly, Fare Guard is a waste of money.

As an experienced traveler who has watched the airline industry closely, I wouldn’t buy it. Would I bet against it as a business? Not a chance.

From The Washington Post:

Warranty Week, an industry publication, [in 2005] estimated that of the $15 billion in premiums charged consumers in 2004, $7.5 billion went straight into the pockets of the stores that sell warranties as their cut.

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About Rakesh Agrawal

Rakesh Agrawal is CEO of redesign | mobile. Previously, he launched local and mobile products for Microsoft and AOL. His personal blog is at http://blog.agrawals.org and tweets at @rakeshlobster.
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3 Responses to Fare Guard – a (bad) option on low airfares

  1. mukesh says:

    It’s interesting that the warranty companies are giving the retailers the lion’s share of the revenue.

  2. That’s often the case on high margin products. You want as much distribution as you can get.

  3. Airfares says:

    this Airfares is important for every
    person.So do not leave this chance.

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