Continental's FareLock Is the Kind of Fee Everyone Likes

Though people like to complain about airline fees in general, there are some that just about everyone likes. Continental's (UAL) new FareLock option is one of those because it offers customers something new while bringing in more revenue for the airline.

FareLock is similar to Air France's "Time to Think" offer. Travelers can now hold itineraries and guarantee the fare for either 72 hours or one week. This, of course, costs money. It starts at $5 for a 72 hour hold and $9 for a week hold, but it goes up from there depending upon a variety of factors.

Before FareLock, travelers had only one option on non-refundable tickets. They couldn't put a ticket on hold and had to buy it. If the person wanted to cancel within 24 hours, that was allowed without a fee. But after 24 hours, it was a done deal. This policy won't change, and that's why everyone loves this fee.

For travelers, FareLock offers a brand new product that wasn't available before. If people want to pay for it, then great, they can. If not, then it's status quo. This is a brand new benefit that can be offered without having to take anything else away.

This particular feature has the potential to be a nice source of revenue for the airline. If someone wants to pay $10 to put a ticket on hold for a week when the flight is during an off-peak time (say, early December) and it's being booked a year in advance, that's excellent. Today, the traveler would either wait for another week to buy or would just buy immediately. Either way, Continental is now opening itself to get another $10.

In addition, Continental has the opportunity to lock in a customer here. Let's say someone is looking at several options and wants to think about it. That person can put a ticket on hold with Continental, and assuming fares don't change much elsewhere, Continental is going to be more likely to get that booking than another airline since it's already been put on hold.

It's also an interesting marketing tool that could lead to upsell opportunities. A quick search didn't find much available via FareLock during the holidays, but a search in January did turn up some flights. The trick is that the lowest fares didn't allow FareLock while slightly higher ones did. So now you get people who lock-in a fare that's slightly higher and then pay a fee on top of that for the privilege. That's excellent extra money for the airline.

Anytime an airline can offer something new to the customer that will be of value, everyone wins. This is one of those offerings.

Related:

• The Good Side of Fees: Paying for Convenience
• Airline Baggage Fees: The Perils of Making Air Travel Suck More
• The Business Logic of Airlines' New Standby Fees