Though having gradually come down recently, the spikes in oil prices this year have made it such a tumultuous time for the airlines that half a dosen of them worldwide, according to IATA (the trade body which represents many of the world airlines), have gone to the wall already this year 2019. For the shrewd management of those who remain, this should be a challenging time to test out the basic economics of demand and supply for the industry.
I believe for most industries, prices are demand-driven rather than cost-based. It means rather than just adding an arbitrary margin on to the base of operation costs, companies charge what they judge the customers are prepared to pay for their products, of course also in consideration of the competitive offers available. As a matter of fact, revenue and market shares, but not profitability, are usually top on the field sales’ mind.
But for the airlines recently, the high fuel prices have made the basic arithmetic of revenue minus cost painfully clear that if the price charged cannot cover the cost of carrying one passenger, it is a critical matter of life and death. The challenge, of course, is in determining to what extent prices can be put up without dampening demand. Air travel is still perceived as extravagant by many people and may be put off in face of higher fares. At no time in history, perhaps, that airlines managers have to put the textbook economics of price elasticity to such vigorous test in running their day to day activities.
Paradoxically, calculating on a per distance basis (ie, mile or metre), air travel is probably the cheapest mode of chargeable transportation on earth. But how much a customer is willing to pay is still determined by how much she perceives the value to her of what she pays for, regardless of the cost. While this can be a blessing for some business (the luxurious brands, for example), more often than not, this is a curse for the airlines.
When we go into the net and begin the process of looking for the most economic flights, there are many possibilities that can be discussed about the period of time when you should travel, many things about strategies on including a weekend always in between in order to reduce the price of the flight, and of course always look to avoid the big holidays.
Nothing new for anybody I imagine, as we can find this information everywhere in every single article. The really interesting thing is to know a couple of data that can help you get some advantage in your flights compared to the others. The idea is that the persons who reads this article will be able to get cheap air fair tickets than the ones who don’t. Let’s take a look at the two examples. The first is improbable. The second will always work.
The first thing then is to consider the following: search engines are not perfect and they do have failures. Theses failures can be on the side where the customer is not benefited directly or even can make the conditions worse, as a mistake where a flight is overpriced, or on the side of a benefit, where the price of the flight for a strange reason appears reduced. (missing numbers, wrong numbers…)
Performing thousands of operations a day, it comes a time when these engines fail, and when they fail you can take the opportunity. Having some contacts in the travel world I know that in a single travel agency an average of 3 failures will happen every month. If you multiply this by the number of search engines, airline engines, hotel booking engines and so on, you can understand that even being not probable there is the chance that it happens.
But we are not going to wait for that chance, because somebody has already studied at which time this things are used to happen. In local time of the place where the headquarter for the search engine’s company is based, the backup of the system is done normally between 2:00am and 4:00am, which is the time when less searches are expected. During backup of the system is when the number of errors drastically increases. Even if from a point of view of sleeping it’s really killing if you are based in the same place as the company, there is always the chance that some numbers go wrong.
Still, the opportunity is minimum, and for the people like me that prefer to keep it simple and most probable, there is another way that even if it can provide with not such great discounts (like losing one of the numbers of the price, in the example before), it certainly always happens.
The best day to book during the week is on Wednesdays, just around 12:30am. And the question is why? Well, statistically it happens that prices change at this time. If the company has decided to set a reduction of price for the first 100 bookings, this will be the moment when the offer will appear. Stay there, and keep refreshing the page you are interested in. Not always, but if it happens, this will be the time and day when it will.
With technology advancing and product innovation proliferating over the years, air travel is served with more efficient aircraft, better seats, more elaborate and user-friendlier in-flight entertainments, even more ticketing convenience, plus many other added benefits (at least by the reputable airlines). But with the evolution of consumerism, ie, the ever-increasing privileges at no additional charge taken for granted all too readily, the question on how to enhance the perceived value of an airline ticket for a customer is becoming increasingly difficult to resolve. It is certainly no more just a marketing riddle, but one for which the whole service delivery team – ground staff and air crew alike – need to be part of the solution.
DiscountFlights.com is a leading Online Travel Agency based in San Francisco, US. The state of the art flight comparison tool allows users to compare the cheapest domestic and international flights and then book and pay online. With more than 1200 airlines and travel sites and over 9 000 destinations to choose from, travelers can be rest assured they’re getting the best online travel deals.