Farecast says it’s 70 to 75 percent accurate when it comes to predicting whether airfares will go up or down. Using this technology, it hopes to become a resource for people who are unsure of whether to buy tickets now or wait for a possible price drop.
I tested Farecast’s predictions on nearly 30 routes over the course of two months, and calculated the company’s accuracy rate at about 61 percent. (Story here.) Farecast VP Mike Fridgen defended the company’s accuracy estimate in light of these findings, saying that’s what Farecast came up with when you total the 38 million predictions it makes every month.
Fair enough. But I can see why airlines like Farecast so much. The great majority of the time, it encourages consumers to buy tickets now instead of wait, and sends them directly to an airline’s Web site.
Farecast said it had relevant news to share with me on its predictions, but only if I held my story for Monday’s paper. Unfortunately, my story was pretty much set to run on Sunday. According to Techcrunch, the news is that the company is coming out with what seems to be an insurance plan against fare increases.
Basically, you pay a small fee to Farecast (up to $10, it sounds like) when the company tells you to wait before purchasing a ticket. If you pay that amount and the fare later increases, Farecast will compensate you for the money you lost while waiting.
An interesting idea, but will it work? I’ll check back in with Farecast in the future to see how consumers respond.