Put it on Credit -

A few months ago – we profiled a new company called Yapta.com, that tracks specific flights, and alerts a user if their flight(s) have dropped in price. The beauty of this service was that you can actually get money back if you’ve already purchased your trip. Some airlines would issue a credit voucher for the entire price drop difference, or charge you a $100 fee if you wanted cash back instead. However, according to a Wall Street Journal article (subscription may be necessary) - it looks like some airlines are switching practices and treating credit the same as cash:


"[I]n mid-July, US Airways quietly changed its policy on vouchers for price changes after you purchase tickets. The carrier now charges a $100 change fee regardless of whether you want cash or a voucher… American, Delta and Continental airlines also charge change fees in these cases; Alaska, JetBlue, Southwest and United airlines all offer vouchers for the full price difference…


Yapta says even as airlines tighten up rules on refunds when they cut prices, its service is still useful in tracking price changes before you buy tickets. Yapta President Tom Romary says 78% of all itineraries tracked by Yapta are pre-purchase -- people get alerts from Yapta when prices change so they can make better buying decisions."


A few points on all of this:

1) This doesn’t seem the optimal result for the airlines. By charging a $100 fee no matter what – they are effectively forcing people to ask for their money back, rather than settle for credit (why would you choose credit over cash??). As a result, they lose some stickiness on getting people to fly their airline again, and they will lose the breakage potential on these credits. Seems like there is a definite advantage for the airlines that they are forgoing here.

2) We note that United is currently an airline that allows the full difference back through a credit voucher. FMV predicts that this will change before the turn of the year. United’s corporate theme song is U2’s “I Will Follow” – and if the major carriers are starting to lean one way – we think they will eventually follow.

3) No matter what they say – we think this really reduces the value proposition for Yapta. 78% of all itineraries are pre-purchase?? Wow. It then becomes a bit mixed with Orbitz’s Deal Detector, SideSteps’ FareTracker and others - and probably underperforms without a related travel product (i.e. actually allowing you to shop for and/or book flights).

4) FMV is waiting for Expedia's Fare Alert and Travelocity's FareWatcher Plus to step it and get a better set of names! (FYI - Fare Market Value can be bought.....)