‘Do you feel lucky, punk?’ Allegiant fare could make Las Vegas’ day

By Richard N. Velotta

Monday, March 14, 2011 | 3 a.m.

In the 1971 Clint Eastwood crime drama “Dirty Harry,” San Francisco Police Inspector Harry Callahan makes his own rules when battling bad guys.

Early in the film, he interrupts his lunch to stop a robbery in progress in a wild shootout that ends in a car turning a fire hydrant into a geyser and one of the robber’s accomplices on a sidewalk reaching for a gun that had spun out of his hands during the action.

“Dirty Harry” then points a massive firearm at the perpetrator and says, “I know what you’re thinking. ‘Did he fire six shots or only five?’ Well, to tell you the truth, in all this excitement I kind of lost track myself. But being as this is a .44-Magnum, the most powerful handgun in the world, and would blow your head clean off, you’ve got to ask yourself one question: Do I feel lucky? Well, do ya, punk?”

I offer that cinematic flashback to set the stage for what one aviation expert is calling the “Do you feel lucky, punk?” airfare under consideration by Las Vegas-based Allegiant Air.

Like Callahan, Allegiant likes to play by its own rules. But sometimes, the airline has to get permission from regulators to play by those rules.

Last year, the U.S. Transportation Department announced it would consider Consumer Rule II, a series of policies about how airlines interact with consumers. When the rules were announced, a lot of buzz was generated about some of the high-profile topics of the rules, and Transportation Secretary Ray LaHood invited airlines and the public to comment on the proposals.

The hot-button topics were tarmac delays and the notification of passengers about those delays; flight-status notifications; the practice of overbooking flights and what compensation inconvenienced passengers are entitled to; the advertisement of fares and how airlines must disclose ticket prices; requirements for airlines in alliances to fully disclose baggage and carry-on fee policies; and uniform policies on the serving of peanuts with consideration to passengers with peanut allergies.

Another slice of Consumer Rule II involves banning the practice of post-purchase price increases. And that’s where Allegiant’s new fare proposal comes in.

After the deadline for formal rule-making comments, upheaval gripped the oil-producing nations of northern Africa. Within three weeks, oil speculators fearing turmoil in the markets pushed the price of a barrel of oil above $100.

Across the nation, Americans felt the financial pinch when they filled up their vehicle’s gas tanks. Airlines, meanwhile, responded by raising the cost of the their ticket prices.

One week ago, McCarran International Airport market leader Southwest Airlines raised fares $10 per round trip. Airline fare-watcher FareCompare.com said it was the sixth fare increase since the beginning of the year and a ticket that cost $200 Jan. 1 is going for about $260.

Allegiant, meanwhile, sent an addendum to its remarks to LaHood making a case for a post-purchase price increase.

Here’s the plan: For one price, you can get the type of ticket a passenger can get today. It’s a set price for a ticket from one location to another. The price could vary by customer based on amenities purchased. For example, fees would bump up the base cost if you take one or more suitcases, purchase the ticket online or add a charge to select the seat you want instead of being assigned a seat at the airport.

As an alternative, a passenger could pay a lower price than the standard rate for a ticket. But the final price of the ticket would fluctuate based on the cost of fuel. If the cost of oil increases between the date of purchase and the date of travel, the ticket price would go up accordingly. If the oil prices come down, the ticket price would be lower.

When the proposal was made public late last month, Mike Boyd, an Evergreen, Colo.-based aviation expert who is never at a loss for colorful commentary, called it the “Do you feel lucky, punk?” fare.

Many of the news stories capitalized on the fact that Allegiant is based in Las Vegas, the epicenter of commercial gambling. Doesn’t it make sense that travelers to Las Vegas roll the dice on what it’s going to cost for their plane tickets?

In his letter to LaHood, Allegiant Chairman Maurice Gallagher noted that it’s fair for the customer to be allowed to share some of the risk attached to pricing a commodity whose cost could change drastically in five or six months. Because Allegiant’s primary customer is the leisure traveler who buys a ticket months in advance of travel, there’s a good chance the actual cost is going to be vastly different from the time of purchase to the time of travel.

Gallagher reasoned that as long as a price ceiling is established and the maximum price is properly disclosed, there should be no reason to ban post-purchase price changing.

“To the extent post-purchase price increases are prohibited, carriers are forced to bear all risk of fuel-price volatility and resulting large cost increases, particularly on tickets purchased far in advance,” Gallagher wrote. “If consumers wish to lock in a price, they would be free to do so. Others who wish to purchase at a lower rate and key their ticket price, in part, to fuel price at the time of travel would also be free to do so.

“This would provide consumers the ability to receive additional savings in the event the fuel price dropped — as could very well be the case for consumers purchasing when fuel prices were high — and would provide carriers some measure of protection against unpredictable increases. In Allegiant’s view, fundamental fairness dictates that both parties to a travel transaction have available a measure of protection.”

Boyd views the proposal as “innovative.”

“If you pay ‘X’ for a ticket, you’re taking a chance that fuel won’t go up,” Boyd said. “I view it as another consumer option. I guess the only thing I don’t know about is how easy it’s going to be to manage.”

It seems as long as there is prominent disclosure of the pricing, there should be no problem with the plan.

Go ahead, Allegiant: Make my day.

Ontario wants maglev

Most municipalities have stood clear of the rivalry between the California-Nevada Superspeed Train Commission’s magnetic levitation transportation system and the proposed DesertXpress high-speed train. The prevailing logic among government entities is that they would support any kind of transportation system that carried passengers safely.

The Las Vegas Convention and Visitors Authority, for example, has stayed neutral, stating that it would be behind any system that brought tourists to the city.

But last week, the Ontario, Calif., City Council unanimously approved a resolution that supports the maglev proposal and expresses “opposition to the DesertXpress high-speed train project.”

The five-page, 27-point resolution says the project “would provide tremendous economic, environmental and transportation-efficiency benefits for Ontario, Ontario International Airport and the entire Southern California-Southern Nevada region and further strongly opposes the DesertXpress project, which the city anticipates would not only fail to provide no more than a small fraction of the benefits of the maglev project but would furthermore effectively block the benefits of maglev from ever occurring.”

Ontario has high hopes for the maglev because the proposed route would go from the Anaheim Regional Transportation Intermodal Center to Ontario’s airport. Because most of Southern California’s airports are at or near capacity — Ontario is an exception — the expectation is Los Angeles and Orange County residents could make a maglev trip to Ontario in minutes and avoid the congestion of Los Angeles International and Orange County’s John Wayne Airport.

The Ontario resolution lists all the maglev benefits and every DesertXpress shortcoming.

One key consideration is that because the maglev project and DesertXpress have identified the Interstate 15 corridor as the primary route for their systems, right-of-way approval would be for one or another.

The resolution said the DesertXpress “would effectively block approval of the maglev project because the (Federal Railroad Administration) has determined that the two projects which would both use the I-15 corridor to Las Vegas are ‘competitive’ with one another and that therefore there is no realistic scenario under which both the maglev project and the DesertXpress project would be built.”

Ontario Councilman Alan Wapner, a member of California-Nevada commission, said the resolution was generated at the request of Barstow, Calif., which has been upset with DesertXpress because the train wouldn’t stop in there and the route divides the city.

Barstow “asked us if we were still supportive of maglev and opposed DesertXpress because it doesn’t do anything for (the city),” Wapner said. “In addition, there’s only room for one of them in the I-15 corridor so if the DesertXpress is there, it blocks the maglev.”

Meanwhile, the Associated General Contractors in Las Vegas has sent a letter in support of the maglev to Gov. Brian Sandoval. It, too, was critical of DesertXpress.

“The DesertXpress uses outdated technology (a technology not even considered high-speed rail in every other part of the world) and it frankly does not make the connections necessary for a sustainable project,” Vice President Steve Holloway said in a letter in January.

“We feel let down, if not manipulated, by the inconsistencies of the DesertXpress project over the past three years and their inability to follow through on important promises,” Holloway said. “From the outset, the DesertXpress claimed their project would be far less expensive than maglev and 100 percent privately funded through construction. Both these claims turn out to be false.”

$1 Las Vegas fares

Spirit Airlines jumped into the Las Vegas-Los Angeles airfare price war with $1 tickets.

The Mirimar, Fla.-based carrier, which offers one round trip a day each to Fort Lauderdale, Fla.; Detroit; and Chicago’s O’Hare International Airport from Las Vegas, announced that it would fly the Los Angeles route with five round trips a day between McCarran and Los Angeles International beginning May 5.

The carrier initially announced $9 promotional fares Tuesdays and Wednesdays in May and early June. The deal was flagged by travelzoo.com as one of its top travel values of the day.

But rivals Southwest Airlines, the dominant carrier on the route, New York-based JetBlue and Allegiant retaliated with low fares. JetBlue and Allegiant fly between McCarran and Long Beach, Calif.

Southwest began selling the Los Angeles route for $29 one way, making the final cost of a round-trip ticket $79.40.

Allegiant had a $10 fare on its website, making the final cost of a round-trip flight from Las Vegas to Long Beach $56.41.

American and US Airways matched the Los Angeles fare with $58 round trips, but United and Delta didn’t.

New York-based JetBlue matched Southwest’s fare on its Las Vegas-Long Beach flights.

Spirit further undercut competitors with $1 fares that operated on days in addition to Tuesdays and Wednesdays. With taxes and fees, a round-trip fare to Los Angeles on Spirit went for $39.40, even less than what it would cost to drive.

Spirit and Allegiant are among the nation’s biggest generators of ancillary revenue and tickets on those carriers don’t include baggage fees. Spirit also charges fees for carry-on luggage, a policy under consideration at Allegiant.

JetBlue allows passengers to check one bag for free while Southwest lets two suitcases fly for no extra charge.

Spirit’s new flights between Las Vegas and Los Angeles will depart at 11:15 a.m., 2:15 p.m., 6:50 p.m. and 10 p.m. A fifth flight will leave at 8:10 a.m. Saturdays and 7:50 a.m. all other days.

Return flights will leave Los Angeles at 9:55 a.m. and 1:50, 4:05 and 8:40 p.m. A fifth flight will leave at 6:30 a.m. Saturdays and 7 a.m. all other days.