Fare Guard from Farecast

Innovative product to protect from fluctuating airfares. Farecast, the Internet start-up that made waves last year by predicting ticket prices for air travelers, is putting its money where its mouth is. Farecast, will begin offering one-week fare guarantees for an extra $10.

The company planned on Monday to announce Fare Guard, a service that guarantees that an airfare listed on the site will remain valid for a week, or Farecast will make up the difference. The hitch is that customers are subsidizing that promise with a fee of $10 a ticket — essentially making the service an insurance program. But analysts said that many consumers could embrace this apparently novel idea, since it helps take much of the risk out of a transaction that is notoriously rife with price volatility.

With Fare Guard, users search for airfares as they would on most other travel sites. But alongside the fare results, Farecast displays a graphic showing the likelihood that each fare will increase in the coming week. (Farecast’s technology sifts through billions of historical fare searches and considers factors like seasonal demand to predict price fluctuations.)

Before clicking through to an airline or travel agency Web site to buy the ticket, users are given the chance to buy insurance, which will cost $3 a ticket until Feb. 1. The consumer merely reserves the flight at the current price. If the price rises before he books the flight, though, Farecast will refund the difference. Farecast will offer the Fare Guard service only on about half of the fares it displays.

Farecast can afford to take that risk, according to Hugh Crean, the company’s chief executive, because its fare predictions are correct at least 70 percent of the time. “No one’s clairvoyant here, but we do have hundreds of billions of price observations to go on,” Mr. Crean said. “With this, we’re standing behind the prediction.”

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