AIRLINE TICKET STRATEGIES NOW
By Joe Brancatelli
October 27, 2010 -- When airlines begin making money—and they all made money, according to their third-quarter financials—they invariably try to push up ticket prices. It's part of the boom-and-bust cycle of commercial aviation: Airlines see revenues rise, push prices too high and add too much capacity, then crash as travelers resist the higher fares and leverage the extra seats for bargains.
This time, the cycle might be slightly different, however. Worldwide capacity—slashed upwards of 20 percent after the meltdown of financial markets two years ago—is creeping up again. But very slowly. The number of flights worldwide last month increased just 6 percent compared to September 2009. Fares are headed upwards too, but at a glacial pace. According to one airline trade group, yield per domestic mile flown increased 7.8 percent in September. They'd fallen 16.6 percent in September 2009.
Given these uncertain times, how can you manage your flight costs over the next several months? Here are some tips worth considering:
Buy Now, Pay (More) Later
The first thing to understand about a ticket purchase in 2010 is that your fare dollar buys less travel than ever before. In recent years, the legacy carriers (Delta, American, United, Continental, and US Airways) have rushed to unbundle products and services from the base fare. You now face a daunting list of possible upcharges after the purchase. Depending on your needs, your extras will cost as much as: $7 for a pillow and blanket; $10 for in-flight meals and snacks; $15 for early boarding; $25 for a ticket processed at an airport or via the airline's call center; $30 for each checked bag; $50 to fly standby or to fly on "high demand" travel days; $75 to sit in supposedly "prime" coach seats; $150 worth of "fuel surcharges" on international flights; and ticket-change fees of $150 for domestic flights and $500 for international ones. As you plan future flights, pay attention to the total price you'll pay, not just the number on the ticket.
Focus on Price, Not the Fare
After two years of flat or falling prices, the talking-head travel experts will surely begin issuing shrill pronouncements about rising "fares." And they will be right. The fare structure will probably rise in coming months as airlines increase their listed prices. But just because published fares rise doesn't mean that the price you pay for a ticket will rise. Ticket prices across the global route map literally change millions of times a day as airlines play computerized games of supply and demand and hide-and-seek with travelers. So rather than respond to every knee-jerk expert talking about a new fare increase imposed by some carrier or another, keep your head (and your wallet) down. Don't rush to buy based on some pronouncement about listed prices. Keep your focus on the actual price you're being quoted for the specific ticket you hope to book.
Know Who's Out to Get You
Legacy carriers deny it, at least publicly, but their collective pricing structure is specifically designed to force business travelers to pay more than vacation flyers. By redlining their lowest prices with punitive restrictions that business travelers will not or cannot meet (Saturday-night stays, roundtrip purchases, advance-purchase requirements, and high change fees), legacy lines try to steer you to unencumbered "walk-up" fares. Depending on your itinerary, walk-up fares can cost 10 times more than the lowest available restricted prices. But alternate airlines such as Southwest, JetBlue, and AirTran don't sell roundtrip-only or Saturday-stay fares, and their change fees are modest or nonexistent. Such is the power of the alternate carriers these days that the legacy airlines must match their more liberal policies almost everywhere they compete. Bottom line on your bottom line: You're almost certain to pay less on any route where one or more of the alternate carriers fly.
Buy Early and Remain Disciplined
If you're unlucky enough to need passage on a route where an alternate carrier doesn't operate, you'll need to make the most of a bad situation. Buy tickets as early as possible, which generally gets you a lower price, then stick to your plans. If you try to change flights, you'll get hit with the hefty change fee and the difference between the advance-purchase price and the prevailing walk-up fare. Another way to keep costs in line: Educate your clients. When one of them says something dramatic—like "Get on the next flight out!"—tell them what it'll cost. You'll be surprised how quickly they suggest you come when prices are more reasonable, after you've had a chance to work the fares to their advantage.
Don't Ignore the Other Guys
The number of airlines plying domestic skies has shrunk, but there are more choices than just legacy players and the big-name alternate airlines. Alaska Airlines may carry the name of the 49th state, but its hub is in Seattle, it's the major player in the Pacific Northwest, it flies coast to coast, and it offers a substantial number of seats to Hawaii and Mexico. Virgin America operates along the West Coast as well as to New York, Chicago, Washington, Boston, Dallas, and Florida. The mash-up called Frontier Airlines now encompasses several smaller carriers and operates from hubs in Denver and Milwaukee and has substantial service around the Midwest. Niche players such as Spirit, Alligiant, and USA3000 focus almost exclusively on leisure destinations, and their service is subpar for business travelers, but they may help keep your costs down in special circumstances.
Shop All the Channels
The ubiquitous online travel sites—Orbitz, Travelocity, Expedia—offer some real advantages, but they are hardly the only alternatives. Compare them to the airlines' own proprietary sites. Consider services like Kayak, which checks dozens of sites automatically. Dohop, improbably based in Iceland, offers an impressive price-search capacity. And ITA Software, which provides the underlying technology for many online booking engines, also has a public fare-compare service.
Find a Good Travel Agent
The widespread availability of online pricing tools has convinced many business travelers that they can go it alone. Nothing could be further from the truth. The more complicated your travel, the more you need a good travel agent. The less time you want to spend tethered to your computer looking to book, the more you need a good travel agent. Their fees are modest considering the tricks they know and the time they can save you. Of course, "good" travel agents are hard to find. How do you get one? Ask friends, family, and business associates. If they have an agent they like, you might like that agent too. Otherwise, interview potential travel agents as you would any other possible service provider. Do they know your areas of interest? Can they show you their expertise? Are they willing to explain what they do and how they price their services?
Know the Basic Tactics
Airlines are masters of changing the pricing game on the fly, but some basic tactics of ticket buying are always relevant:
• Don't buy on the weekends. Airlines tend to file price increases on a Thursday evening. Then they wait out the weekend as other carriers decide whether to match. If they don't, the fare increase is withdrawn on Monday morning, but if you bought over the weekend, you won't get a refund.
• Even if they cost more, nonstop flights are almost always a better option than connecting itineraries. The more flights you take to complete your journey, the greater the chance of delays and lost luggage.
• Always check flights a few hours or a few days around your planned travel time. Prices often differ dramatically.
• Always inquire about the availability of upgrades to first class. Super-elite flyers don't always get them all. They are often available for purchase at the gate before departure. And remember that several airlines have reasonably priced seats in more spacious parts of the plane. AirTran calls their upfront cabin business class. Frontier sells "stretch" seats with extra legroom. The first few rows of most JetBlue flights have seats with additional space for a few dollars more too.
Value Your Time
There is always a way to slash a few dollars off your ticket price. And it's guaranteed that someone—maybe several someones—have paid less than you to fly on the flight you've chosen. But is saving $25 worth the two hours of your time you invested to find the lower price? Remember Seat 2B's Golden Rule of Ticket Buying: The fairest fare is the one that balances the price you pay with the time it takes for you to find and book it.
The Fine Print…
The Transportation Security Administration's Secure Flight Program finally comes into full effect on Monday, November 1. The TSA will insist that your submit the following information whenever you book a ticket: your full name as it appears on government-issued ID, your date of birth and your gender. Here's the TSA explanation of its intentions.
ABOUT JOE BRANCATELLI Joe Brancatelli is a publication consultant, which means that he helps media companies start, fix and reposition newspapers, magazines and Web sites. He's also the former executive editor of Frequent Flyer and has been a consultant to or columnist for more business-travel and leisure-travel publishing operations than he can remember. He started his career as a business journalist and created JoeSentMe in the dark days after 9/11 while he was stranded in a hotel room in San Francisco. He lives on the Hudson River in the tourist town of Cold Spring.
THE FINE PRINT This column is Copyright © 2010 American City Business Journals. All rights reserved. Reprinted with permission. JoeSentMe.com is Copyright © 2010 by Joe Brancatelli. All rights reserved.