One small step for a website, one giant leap backward for transparency.

In an age when online travel agencies are taking steps to improve price transparency by increasingly quoting the total price for airfare, rather than the deceptively-low price prior to taxes and fees, United Airlines is going the other way. This is particularly frustrating because their site used to quote fares more honestly.

Last week, United’s fare display shifted from quoting fares with all-in pricing to the new pre-tax/fee rates. At left, you’ll see a screenshot of a fare as it’s now quoted on the first results page. Yes, there’s a mention of additional fees and taxes to be added, but these used to be included in that box.

(One improvement in that display is the number of seats available at that price. This is something the major online travel agencies like Orbitz and Expedia have been offering for a while now, but it’s nice to see United offering it, too.)

Below, you’ll see what happens when you click through to the next page, and taxes are added in.

This change is raising the hackles of a number of United frequent fliers. Here’s an excerpt from a letter forwarded to me by reader Antonio:

Dear United,

I must say, I’m shocked at how bad the new online booking system is. It has all of the telltale signs of a “cheap discount” carrier, and I mean that in the worst possible way. To quote the price not including taxes and fees is misleading, and leaves a really bad impression on United once a user clicks on an itinerary and sees the price jump by a significant amount. And saying “Hurry, purchase today” at the top of a potential itinerary is just tacky.

If United wants to become Allegiant, then by all means continue down this path. But if United want to retain the status of being America’s premium flying option, then please retain an elegant website that treats the customers with respect and doesn’t try to pull a fast one in terms if pricing.

Though I would question the use of the term “retain” in referring to United in the same breath as “America’s premium flying option,” Antonio is absolutely right on other counts: United should treat customers with dignity and show the public the full price, like it did just one week earlier.

Related:
- Hotels will be forced to disclose fees and charges up front… but not to US customers
- Will airlines start unbundling fuel entirely from the fare?

As predicted here, Expedia has decided to make its temporary elimination of the airfare booking fee permanent. This follows in the steps of Priceline and Hotwire, which stopped adding a surcharge over a year ago.

The Expedia fee was scheduled to go back into effect on June 1. The company had two choices: Quietly reinstate the fees, and face the marketing wrath of the no-fee competition, or “permanently” kill the fee with a big fanfare. How’s the fanfare sound on your end?

The big agencies still get a cut of the sale, unlike most mom-and-pop travel agencies, so the extra booking fee monies were additional revenue. Many customers (31%, according to here) were doing their searches on the major agencies’ sites, and then going to the airline to book directly and save the fee. Now, the agencies’ fares should be on the same level as the airlines’ own websites.

Interestingly, Expedia also cut change fees in the same breath:

Other fee changes also were announced Wednesday. Expedia.com said it will eliminate the change-and-cancel fees on hotel, car rental and cruise reservations and on most flight reservations. Flights that are part of certain package deals will still be subject to a fee when reservations are changed or canceled. Expedia.com said it will resume charging $20 [on June 1, 2009] to make a flight booking over the phone, a fee that was halted during the promotion.

Eliminating change-and-cancel fees is nice, but it’s just the surcharge, not the totality of relevant fees. Airlines are charging $100, $150, or more to change itineraries for non-refundable booking classes, and Expedia can’t waive those fees. The elimination only applies to the surcharges which Expedia tacked on.

In any case, this puts pressure on Travelocity and Orbitz to make fee cuts permanent as well. Both of those sites’ fee-elimination policies have a sunset clause, and fees are scheduled to re-emerge on June 1. Neither site is commenting on whether they’ll follow Expedia’s lead or not. We’ll see if there are more announcements of newly-permanent fee reductions in the coming days…

Three weeks ago, to the day, I asked when Orbitz would drop its airfare booking fee in response to fee-cutting by Priceline, Hotwire, Travelocity, and Expedia. The answer: Today.

Orbitz has followed suit and has temporarily ended the airfare booking fee, for tickets purchased through May 31, 2009. The fine print: “Valid for round-trip or one-way flights through May 31, 2009. Excludes multi-carrier itineraries and flights originating outside the U.S., Canada, Mexico and the Caribbean.” Too bad about the multi-carrier itineraries. That’s something Orbitz excels at, so perhaps it makes sense that they still charge a premium for it. But still, too bad.

In their press release, they pitch that the combination of the newly-deleted fees and the Price Assurance program (analyzed here and here) makes them the online agency of choice. Assuming that the fares are the same at, say, Orbitz and Expedia, but the only difference was Orbitz’ Price Assurance program, then yes, I’d choose the no-fee Orbitz (even if I’m still a skeptic as to the real worth of Price Assurance).

But regardless: the clock is ticking. May 31 is the same expiration date as Travelocity and Expedia, which is not a huge window of opportunity.

But will they really bring fees back on June 1? I still maintain that, once you and your competitors let the genie out of the bottle, it’s hard to be the first to squeeze it back in. Priceline and Hotwire are unlikely to add the fee back in. Will Orbitz blink? Will Expedia? Travelocity?

I’m still betting that the no-fee environment will be extended. If one agency brings the fee back, expect a marketing blitz by competitors, touting the difference.

In the meantime, consumers benefit.

Nearly three years ago, this site reviewed the then-burgeoning field of airfare aggregators, also known as metasearch sites. These sites let you compare the fares available across multiple airlines and across multiple booking sites, to help you find the lowest fare. Last time, Kayak came out on top. How much has changed in the last three years?

For starters, there are sites which have folded, some new competitors, and sites that changed their model significantly. At the same time, there has been pushback from airlines and suppliers, some of which have resisted the aggregator model. (The lawsuits between American Airlines and Kayak, which initially resulted in American Airlines no longer being listed in Kayak results, was perhaps the most prominent case of pushback. Since October 2008, aa.com results are back in the results. More on that below.)

The result: The golden ring of a truly complete search, covering all the options and all the providers, is still a ways away. No single site actually finds every flight option, every fare, or every seller.

But that doesn’t mean that there aren’t differences between the aggregators. It’s time to disaggregate the aggregators again.

This year, each site was put through multiple tests. Four kinds of itinerary were tested: A large-city to medium-city domestic US flight with multiple carriers offering direct service; a medium-city to small-city domestic US flight with at least one change of plane required; an international flight with a US origin; and international flights (from Paris to Dubai, and Manchester to Madrid) to test how sites do for non-US flights. For each of these flights, I tested a short-term booking (7 days advance purchase) and a longer-term booking (30 days advance purchase).

This time, I compared Kayak, Sidestep, Mobissimo, TripAdvisor Flights, Momondo, Skyscanner, WeGo (formerly Bezurk), Trax, Farecast, Fly.com, and Dohop. Sites which were on the list last time but either folded or stopped doing metasearch include FareChase (bought by Yahoo, then abandoned in March 2009), PriceGrabber, and Qixo.

So which aggregator came out on top in 2009? Here’s the summary, with site-by-site reviews thereafter… (more…)

Back in June, Orbitz launched “Price Assurance,” by which customers would get refunds if other customers bought the same itinerary for a lower price. I reviewed it, with skepticism, when it was rolled out.

Here’s what I wrote when it was rolled out:

Unlike Yapta, which tracks fare drops and alerts you when the published price goes down, Orbitz will automatically send you a check IF AND ONLY IF another Orbitz customer purchases the same ticket you booked, and they do it for less money. If the price just goes down, but no one buys that ticket on Orbitz, you’re out of luck. No refund.

So when would you be more likely to win in the refund lottery? It would need to be a frequently purchased itinerary, so I’d be expecting it on major business routes like Washington-Chicago, San Francisco-New York, etc. Trying to get a price drop refund on that Bozeman, Montana to Fayetteville, North Carolina itinerary? Good luck with that.

So were my hunches right, or wrong? I asked Orbitz what the numbers really look like. Here’s an update from their reps:

Orbitz has mailed refund checks to travelers on over 2,400 routes since June 2008. This information is based on flights purchased on Orbitz.com in instances where a customer has purchased an airline ticket, and a subsequent Orbitz customer purchases a ticket on the same flight at a lower price, automatically generating a refund.

Subsequently, Orbitz provided a spreadsheet with the top ten refunded routes from ten cities. (The document was labeled “top 20,” but there are 70 routes mentioned.)

As I predicted, the majority of routes are indeed major business routes between American cities. There are some quirky outliers, though. Atlanta to Liberia, Costa Rica; Chicago to Guadalajara, Mexico; Miami to Barranquilla, Colombia; New York to Paris. The major business routes remain king, though.

Have any of you bought a ticket on Orbitz and gotten a refund afterward? If so, hit the comments.

[UPDATE: In a followup, Orbitz has provided the top 20 routes that have generated refunds. The list of 70 routes originally posted represents the top ten refund routes for those particular departure cities. I'm appending the top 20 list as well. Thanks to Orbitz for sharing the data!]

See the complete list, as provided by Orbitz, below the jump…

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Elizabeth of Go Green Travel Green (not pictured) writes in to remind me of the new “price assurance” policy that Orbitz rolled out last week.

After you book your flight, Price Assurance guarantees that if someone else books the same flight (same date, same time) through Orbitz at a better rate than yours, Orbitz will send you a check for the difference (between $5 and $250 per person).

According to the Wall Street Journal, the move is an attempt to ward off competition from Priceline and Hotwire, both of which eliminated the ticket booking fees so often associated with online travel agencies. (Orbitz charges a $6 booking fee edit:$4.99 to $11.99 booking fee, variable depending on the itinerary, per ticket.)

So instead of offering a guaranteed discount (i.e., no booking fee), Orbitz is offering you the possibility of greater rewards, but for greater risk. It’s a gamble. And, in my estimation, it’s a losing bet, with the odds favor the house on this one.

Unlike Yapta, which tracks fare drops and alerts you when the published price goes down, Orbitz will automatically send you a check IF AND ONLY IF another Orbitz customer purchases the same ticket you booked, and they do it for less money. If the price just goes down, but no one buys that ticket on Orbitz, you’re out of luck. No refund.

So when would you be more likely to win in the refund lottery? It would need to be a frequently purchased itinerary, so I’d be expecting it on major business routes like Washington-Chicago, San Francisco-New York, etc. Trying to get a price drop refund on that Bozeman, Montana to Fayetteville, North Carolina itinerary? Good luck with that.

And besides, do you really expect fares to go DOWN much anytime soon? If Orbitz starts offering the other side of that wager, I’ll be in.

For the most part, I’d stick with either the airline’s own website, Priceline, or Hotwire, to save on the booking fee.

Related:
- The black art of repricing tickets
- Track airfare before and AFTER you buy?
- Putting low-fare guarantees to the test
- Orbitz (aff)

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Reader Joe writes in:

I live in Ventura, California, and I was looking at a flight to Philadelphia. But the fares don’t make sense. It’s cheaper for me to fly from Santa Barbara to LAX to Philadelphia than it is to fly nonstop LAX-PHL. I don’t get it. It’s cheaper to connect at LAX??! I’m flying further, so why is it less? About $80 less, too. Why??

Ahh, airline economics. Use more of a resource, pay less! But believe it or not there’s sometimes a logic to it.

In fact, this is quite common. I recently faced a similar thing when buying a ticket. It was cheaper to fly from Greensboro to Charlotte, and onward to San Diego, that to fly nonstop from Charlotte to San Diego. Adding the Greensboro to Charlotte leg actually caused the price to drop about $70.

Two important things to remember:
1) Pairs matter. Distance doesn’t.
Fares won’t necessarily depend on the route you fly. Fares are based on city pairs — the departure and destination city.
2) Supply and Demand.
Supply and competition for a particular route will generally trump other economic factors like distance flown.

Airlines price flights based not only on the costs they incur, but also on the demand for the route and the amount of competition for the particular city pair. In your case, Joe, the LAX-Philadelphia route may have seen hefty sales already, selling out the cheaper seats on that route. But the Santa Barbara-Philadelphia city pair may have seen only light sales, so the cheap seats could still have been available.

And don’t forget fare sales: If a competitor is driving prices lower on the Santa Barbara-Philadelphia route, then prices are likely to drop. This is especially noticeable when a new, cheaper competitor starts service from a city. (The “Southwest Effect” is a common phrase to describe the effect of fares on a city when Southwest starts service in a market.)

[As a sidebar: Given the fact that you'll have to change planes, thereby risking a misconnection and spending more time in airports, is it really worth saving a few bucks to increase your inconvenience? You might also be paying a nonstop premium, which could easily be worth it. I realize your question was about why the price difference exists, but the lower price may still be a bad value.]

Bottom line: If you’re trying to make sense of an airfare, ignore distance. Ignore where you’re changing planes. And ignore superficial logic. Focus on price for the explanation.

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A recent article on fuel surcharges offers a hypothetical scenario of what consumers might expect in coming months or years:

“If fuel continues at this level, you may have a situation where an airline prices a ticket absent fuel,” said Terry Trippler of TripplerTravel. “Other than that they really don’t have a lot of options (to offset higher fuel costs).”

Much recent innovation in pricing in the travel industry (not just at airlines) has centered on the concept of “a la carte” buying. Pay only for what your use, not for a package of all the services available. So unbundling the cost of fuel isn’t entirely out of the realm of possibility.

Cruise lines and hotels have already done something like this, requiring a fuel surcharge that wasn’t included up front at the time of reservation. Travelers were shocked with a bill at the time of check-in. Shady? Yes.

But if fuel wasn’t a surcharge, and was simply a charge that everyone paid in full at the time of check-in, it might be less offensive to multitudes of travelers.

So what might this look like? You’d buy a ticket that covers the privilege of getting onboard, much like you pay a fee for renting a car. Your ticket would reflect your class of service, and any “amenities” you chose (food, baggage, early boarding, legroom… whatever) but the cost of the fuel wouldn’t be included up front. You might pay for the fuel at the time of check-in, or the carrier might give you the option of pre-paying (hedging?) and locking in a rate.

By charging the passengers for fuel on the day of travel, the airline would avoid the fluctuations of the oil market almost entirely. Fuel hedging strategies would be moot. Airlines that did this could sell seats without worrying about the price of Jet-A kerosene. And in a sense, this is logical: Hertz and Avis aren’t really affected by changes in oil prices, so why not Continental and jetBlue?

Of course, this would be awful for consumers, whose ability to predict the actual cost of travel would be flushed down the toilet. Budgeting would be harder. Travel expenses would be much more fluid, and the net effect on prices would likely be upward. And upward by a bit, since the fuel bill on a 7000-mile trip can change substantially with small shifts in the price of oil. “Low fares” would be a thing of the past, unless the airlines started “free fuel” promotions.

The saving grace for consumers is that it would take some cartel-like coordination to see all the major airlines start treating fuel this way. If it’s a single major airline that’s the first mover, there is bound to be a strong negative reaction in the media. But as the article cited above notes, it wouldn’t be the first time someone tried this:

If airlines do unbundle fuel costs from ticket prices, it would not be the first time. During the energy crisis of the late 1970s, charter airlines had separate fuel charges that were set just before takeoff.

Yesterday, it was charter airlines. Today, I wouldn’t be surprised to see Skybus or Spirit try something like this, since they’re already nickel-and-diming their customers and they’re known for doing anything to make a buck.

But either way, look out. Unbundled fuel could be coming your way, and you shouldn’t be happy.

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If you’re booking flights on Continental, you might as well give this promotional code a shot.

To redeem, go to continental.com and choose “Advanced Search” at the bottom of the blue fare search box on the left side. On the following screen enter ZB2UAS82JH in the “Offer Code” box halfway down the page. Then choose flights, etc.

No guarantees on how long this code will be valid, but give it a try.

(Thanks to reader Jim V. for sharing!)

UPDATE: Try ZB5HBFJEBT as an alternate discount code. Thanks, Srinivasan!

UPDATE 2: These codes come and go quickly. For a more stable set of discount codes on American Airlines, not Continental, consider buying an Entertainment book for as little as $10, depending on the area. (Prices for the book fluctuate throughout the year, but the discount codes stay the same for a 12-month period.)

Related:
- Save up to 63% on international flights and get $15 off your flight by clicking here (vayama.com)
- Use Coupon Code CHEAPOAIR10 to Save $10 Off All International Flights (cheapoair.com)

Reader Anton asks:

How do you search for Premium Economy fares? Many airlines (trans-Atl, trans-Pac) have them but NONE of the travel sites/search engines allow you to look for them?!

You’re absolutely right, Anton: You’ll be hard-pressed to find a website that let’s you search for premium economy fares in a way that compares apples to apples.

“True” premium economy is typically a separate mini-cabin on long-haul international flights, and compared to regular economy, it usually offers some combination of wider seats, more legroom, more recline, and better food and drink. Better than coach, but not quite business class. As Dave Demerjian noted in his recent roundup of premium economy options in Business Traveler magazine, some airlines also let premium economy customers check in with the (shorter) business class lines at the airport.

Airlines that feature true premium economy include Air New Zealand, ANA, British Airways, EVA, JAL, SAS, Singapore (ultra long-haul flights like Newark to Singapore only), Thai, Virgin Atlantic. (Acronymic airline names apparently increase the likelihood of a premium economy cabin!)

While that list is not authoritative, there’s one glaring (and intentional) omission: United’s Economy Plus. Economy Plus, at the front of United’s cabin, only offers extra legroom, but none of the other features or services typically associated with premium economy.

Fares for true premium economy can vary widely, but they are rarely cheap, making a search engine for these fares especially desirable. When there’s a sale, fares might be a tiny smidge above regular economy, and thus a great deal. Or, they could run above full-fare economy rates, which is muscling into business class fare levels. At that point, you’re overpaying.

So far, there hasn’t been an aggregator or online travel agency that has created a tool that searches for premium economy fares. And travelers — and, I’d argue, airlines too — have lost out.
UPDATE: Reader Brian in comments notes that Expedia’s UK site does let you narrow your searches to premium economy. But you may run into trouble if you need to book a connection (in regular economy) to the long-haul flight in premium economy. But it’s a start!

So why is it so hard to find these fares? Each airline has a proprietary economy fare basis code for premium economy. And because that code is in the economy fare-class universe, search engines can’t parse it out from regular back-of-the-bus economy class tickets in fare searches.

So you’re left hunting and pecking, browsing over to each individual airline’s website and check the prices. Or doing the same thing by phone. Perhaps you could find a travel agent, too. But honestly, there’s got to be a way to solve this problem. FareCompare? Kayak? I’m looking at you guys!

Related:
- Demystifying premium economy
- Space by Space Basis (Business Traveler Magazine)