The unveiling of a Travel With Confidence option with no-fee cancellation is making Allegiant the smart bet for upcoming trips.
There’s a lot of uncertainty when it comes to air travel. The shutdown at the Department of Homeland Security has created chaotic, long waits at the country’s airports, and the war in Iran has spiked fuel prices for airlines and driven economic uncertainty for many Americans.
With that in mind, it’s not hard to understand why travel buyers might be hesitant to shell out their money for a travel experience that could be frustrating, especially when larger events have them tightening their overall budgets.
Allegiant has come out and said, “Book anyway. And if you decide not to go—we got you.”
The Las Vegas-based travel company announced its Travel With Confidence policy on Monday. For flights between March 23 and the end of the partial government shutdown, booked passengers can change or cancel their plans without penalty. Passengers can also cancel and receive a refund if they decide not to travel at all. The temporary policy change applies to both new and existing bookings.
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“We know travelers want to feel confident and in control when they book a trip,” Drew Wells, Allegiant’s chief commercial officer, said in a statement. “This policy gives them the flexibility to adjust plans if needed, while our network–which includes many smaller, easier-to-navigate airports–helps make the travel experience simpler from start to finish.”
To rebook or cancel without penalty, travelers who booked need only contact Allegiant Air customer service.
So far, Allegiant is the only travel company to have publicized a flexible policy during the DHS shutdown. No other airline has announced any changes to its change and cancellation policies due to the shutdown, but some airlines may offer exceptions on a case-by-case basis.
Without an airline or travel company offering an exception to its change and cancellation policies, travelers have little recourse if they choose to cancel or change their trip because of long airport lines or economic uncertainty. Many travel insurers offer Cancel For Any Reason (CFAR) policies, which allow travelers to cancel their trip and receive reimbursement for any reason, unlike standard policies, which cover only a set list of reasons, such as illness, legal difficulties, natural disasters, or job loss.
CFAR travel insurance policies are among the most expensive products offered by insurers, because of the flexibility they offer. They can cover gray areas not covered by standard policies, such as a traveler wanting to cancel their trip because they anticipate a job loss, even if it doesn’t happen, or they simply want to change their mind and keep their money saved in reserve instead of spending it on a trip.
Ultra-Low-Cost Carriers (ULCCs) like Allegiant face greater pressure when fuel costs spike. These carriers spend a higher percentage of their budgets on fuel than legacy airlines, and they have less ability to raise fares because they’ve made low fares a major part of their brand. The price-sensitive buyers who make up their customer pools also tend to be among the first to cut discretionary spending when overall consumer confidence softens.
Airlines and travel companies are extraordinarily exposed to consumer confidence because travel spending is typically discretionary. It’s also speculative, meaning that buyers are placing their trust in future conditions being favorable for travel (i.e., if you buy your summer vacation in February, you’re betting that you’ll still want to take it by summer).
Allegiant hopes that by offering flexibility, travelers who are on the fence about booking will go ahead and book, knowing they can cancel if the shutdown is still ongoing by the time they travel, and they don’t wish to face the lines at the airport.