Options Away: Insurance Against Airfare Price Hikes

The underlying idea behind “Options Away” is quite interesting.  I can’t help but wonder why the airlines and/or the various intermediaries such as Expedia and Orbitz haven’t already implemented similar arrangements.

The “insurance” described in the article referenced below is different from traditional travel insurance which requires purchasing a ticket prior to buying the insurance. Here, one can purchase a call option that locks in a favorable fare today without obligating the consumer to actually purchase the ticket.

Options Away: Insurance Against Airfare Hikes

“Options Away… will sell you the right to buy a plane ticket within a certain timeframe at a certain price. If the airfare goes up within your option’s time frame, good for you—you can buy the ticket, paying your optioned fare, and Options Away pays the difference. If the airfare goes down within your option’s timeframe, you simply ignore your option and buy your ticket at its now lower fare. Either way, you’re out the option fee, but you are not obligated to buy the ticket.”