Airline Flight Shopping, the cost of not knowing

§   Walk through just about any commercial aircraft during a scheduled flight and you will be hard pressed to find any two passengers, on the same itinerary, who paid the same price in the same class in the same seat section. Similar difficulty will be experienced, even when walking through a low cost airline flight. Pricing on a charter flight will not be so diverse, but, even on that plane, different passengers will have paid different prices.

On the scheduled airline flight, maximum yield pricing is a prime factor. On the low cost airline flight, the add on charges are often a big factor. On the charter flight, as well as the scheduled airline and low cost airline flight, where and when the ticket purchase was made are factors in the total price paid.

The first two paragraphs refer to a strictly limited situation of same itinerary and same point A to point B. Leave that limitation and the factors that influence price paid increase greatly.

§   Airports are a big factor. What each airport charges airlines and passengers will impact total ticket price. Differing municipal, county, state and federal taxes and fees, fixed and operating costs and organization based costs weigh upon the charges and fees that each airport will ask of airlines and passengers. That subset of legacy airlines and low cost airlines and charter services which serve each airport will differ widely and impact total ticket price when shopping simple to complex itineraries, domestic or international.

Itineraries are a big factor. Non stop flights are nice, but, in the absence of a low cost airline or charter airline that flies A to B direct, a multiple stop itinerary will usually cost less. The multiple stops allow legacy carriers to make use of their hub and spoke systems and interline agreements to get you from A to B. That flex allows pricing flexibility. The same is true of low cost carriers that hold interline agreements with legacy carriers.

Global Distribution Systems are a big factor. There are four major GDS and six lesser GDS which airlines use to make their flights and fares available to the buying public. No airline subscribes to all ten GDS and most subscribe to one or two. Exceptions are low cost airlines and charter airlines which maintain their own database of flights and fares and build their own User Interface to distribute their products to the buying public. A third exception is airline consolidators which maintain their own database of flights and fares that they hold privately, under contract, with a small subset of airlines. Most consolidators are small companies that hold contracts with fewer than sixty airlines from which they buy tickets, in bulk, and resell to the general public. Traditionally, airline consolidators sell their tickets through travel agencies and corporate travel coordinators and government agencies and locally, in niche markets. In recent years, a growing number of consolidators are moving to the Internet. Some, like the low cost airlines and charter airlines, maintain their own database of flights and fares and distribute their products publically by building their own User Interface. Some subscribe to one of the ten GDS and distribute their products that way and some contract with tech companies which manage their database and build a UI for them.

Politics and Trade Agreements are a big factor. Stronger and more congenial political ties between two nations usually allow for lower fares for flights between them. Agreements between nations can be focused on civil aviation in the form of Open Sky agreements or rolled up in broader Trade Agreements focused on business and cultural relations in general. Both forms can facilitate airline operations and reduce operating and fixed costs. Local politics can also play a roll in reducing costs by facilitating and virtually subsidizing inbound tourist or business travel. Such efforts usually involve local businesses that have a vested interest.

Where you buy is a big factor. An aggressive and proactive travel agency will hold subscriptions that grant access to all four major GDS and a geo-strategic subscription with one or more of the six lesser GDS. Such an agency will also have contracted access to geo-strategic low cost airlines and several airline consolidators which hold inventory that meets their business focus. Such an agency, then, will have access to about ninety percent of all available flights that might be of interest to a local client. Such an agency, then, will be able to offer a local client a price selection from about seventy percent of all available fares. Considering that the two largest GDS, combined, hold about forty five percent of all available flights and a lesser percentage of all available fares, a less aggressive and less proactive travel agency will be significantly less able to offer flight selection and price options to a local client. When you shop airline flights and fares online, you are the travel agent. You will have all the tools needed to be an aggressive and proactibe travel agent. Knowledge will be a temporary shortfall.

When you buy is a big factor. For myriad reasons, the first three months of each calendar year will have a greater number of discount fares available than during any other period. Bi-annual airline schedule updates, usually early spring and early fall, are a second period when more discount fares come available. Since discounted seats are always limited in number, early shoppers will find them; later shoppers will not know they ever existed. When airlines, agencies and consolidators want to accelerate the sales rate for seats on particular flights or itineraries, they will offer them at a discount. Again, the early shopper can seize the sale. Early also applies to each shopping day. Early hour shoppers will be the first to see newly released discount fares and the last to see currently discounted seats before they are sold out. Avoid buying tickets on the weekends, if you can. Airlines often file fare increases late on a Thursday. Then the airline can wait the weekend to see if other airlines match the increase. If other carriers do not match it, the increase can be cancelled come Monday. If you bought a ticket that Friday Saturday or Sunday, you will not be given a refund. Some discounts are offered just days or a week or so before departure. That person who must travel in just days or within a week or so is the person who is wise to shop for them. It is not wise for others. A person who can shop flights and fares and purchase airline tickets at least twenty one days before departure is wise to select an acceptable itinerary and fare and buy the ticket. The cause for the previous two sentences is relative chance. Many more discounts are offered more than twenty one days in advance and consolidators are barred from selling their tickets less than five full calendar days before a departure. That person who has the advance shopping time available is far more likely to lose a lower priced seat than to gain one by waiting. Whenever time permits, check flights and fares available shorty before and after the targeted departure date and time. Hours and days can present a widely different set of fares and itineraries.

When you fly is a big factor. Some globally relevant, premium pricing periods are: three days before and after a major holiday or popular event, December 13 through January 7, Peak travel season, any cause that inceases demand. Peak travel season varies between the northern and southern hemisheres and less so between regions within each hemisphere and between west and east. In North America, the lowest cost travel period is from January 15 through April 15 of each year and the highest cost period is from June 15 through September 15 of each year. Within each week, Tuesday, Wednesday and Thursday are the lowest cost travel days while Sunday, Monday and Friday travel is at a premium. The cause for that is business travel which increases the demand for outbound flights on Sunday and Monday and inbound flights on Friday. Within each 24 hour day, every day of the year, the lowest cost seats are available on flights departing between 8 PM (2000 hours) and 8 AM (0800 hours). Flights departing between 8 AM and 11 AM are the highest priced flights of the day. Flights departing between 11 AM and 8 PM will be priced anywhere between the lowest and highest priced flights depending upon historical demand levels for that flight on that itinerary. The arrival end of each itinerary produces similar disparity in pricing during similar time periods each day. The cause for these disparities is simply popularity. More people want to depart and or arrive during some time periods than during other time periods each day so airlines can charge a premium to take advantage of that demand.

¶   It would be simpler and maybe even nice if a ticket for an airline flight from A to B was always X price, regardless of day, time, season or itinerary. It seems doubtful that such a set price will ever be established. The plus side of this coin is for the savvy shopper, you or your agent. Some knowledge of the diverse and fragmented air travel industry will enable you to leverage that diversity and fragmentation to build precisely the flight itinerary that you want and or set the price that you are more willing to pay for an acceptable itinerary. Sometimes, you will even be able to write yourself an appreciable discount, even when the industry offers you no discounts at all. The balance of this article will empower every traveler or agent to shop strategically and leverage the complexity of the air travel industry for their own benefit. This article will focus on using the Internet to shop flights and fares, however, much of the guidance applies equally as well to brick and mortar, shoe leather shopping.

¶   Advertising. The function of advertising is to attract you and distract you. A vendor wants to attract your attention and keep it because you might find a better itinerary and or a better price somewhere else. Some ads work in a subtle way and some are blatant. Our lowest price guarantee refers to the lowest price available to that vendor, at that time, under those conditions but does not refer to a price available to other vendors, at a different time, under different conditions. The meaning of the word Our is often subordinated within the context of the additional words and phrases. A bold challenge to find a lower price anywhere else and we will do something nice can be mis-interpreted as confidence that a lower price cannot be found. Both examples tend to attract attention and discourage comparison shopping. The ploys and tactics available to advertisers are endless but they can only have affect if you let them. In the absence of hype and guile, an ad that says: "this is our product, this is the price and this is a reason to buy it", might be worth further study if you have an interest.

¶   The more you ask for, the more you pay. That begins at the Internet booking engine (and your agent’s terminal) and ends when your trip ends. A particular airline, a certain departure time, a preset itinerary, preferred seating and more demands will all cost you extra and that is just the list before you buy the ticket. Airlines have been unbundling services and charging seperate fees for many things that used to be bundled with the fare. A seating fee, a baggage fee, a pillow and blanket fee, a meal or snack fee, a call center fee, a change fee, a cancellation fee, a processing fee, a ticketing fee, ad infinitem. When using a booking engine, do not select a particular airline or time frame. Only input the itinerary and date or, when offered, use a flex date search function. That way you can scan a more complete list of itineraries and fares available to that vendor. When you make a selection, try to stay aware of that or those airline’s add on fees. Sadly, many of the fees will only be found within many lines of small print. Caution: airlines could start charging a fee to call them to ask about their fees.

¶   Internet Booking Engine. The IBE is a user interface that accepts your input, queries a database and returns a set of results based upon your input. Most IBE will query one database. Some query two or three. Some will query the inventory of multiple airline consolidators when placed in one database. Some comparison shopping sites will sequentially query all four major GDS when the aggregate of participating Online Travel Agencies, OTA, contains at least one subscriber to each GDS. In each case, the flight search will return a fraction of all available flights and a smaller fraction of all available fares. Experimenting with the IBE of several OTA, query results will often be nearly identical. Minor differences in fares reflect the difference in booking fees or other charges. Slightly larger differences reflect the appearance of specially negotiated fares that an OTA can obtain with a subset of airlines and input to the database. In each case, when the flight itineraries presented are nearly identical, even though shopping different OTA, the same GDS is being queried. With that knowledge, you can experiment until you find four IBE that present an appreciably different set of flight itineraries and fares. It might be more efficient to call or email each OTA and ask which GDS they subscribe to, but, what fun is that? By any method, having access to four GDS will faciliate current and future shopping. Add to that, IBE access to one or more airline consolidators and to some low cost carriers and you have become an aggressive and proactive travel agent.

¶   Beyond The Internet Booking Engine. You do not have to accept what any one IBE gives you. You can use a variety of tactics to combine the results given by multiple IBE to build a perfect flight itinerary and or a lower total trip price. When provided, the multiple leg function of just one IBE can be used to build a precise itinerary and or a lower trip cost. Essentially, a flight from A to B can be itinerary enhanced or cost reduced buy purchasing a return ticket from A to C and a return ticket from C to B. This is true of a domestic or international flight but, more often, the international flight will benefit the most. For a quick example; a business class flight from A to B can be itinerary enhanced and cost reduced by booking a short haul return flight in coach class from A to C, saving business class for the long haul return flight from C to B. That can often be done using the same IBE. Variations could be something like using a low cost airline IBE for the A to C and then the IBE of a consolidator that has the C to B under contract at a great price. Possibilities for such creative shopping are nearly endless, but, before total immersion in these waters, consider the downside caveats and costs. A big caveat is that airlines will not be obligated to you if you miss a cross ticket connection. Results could be both a trip and a financial catastrophe. Extra layover time between cross ticket connections will reduce the chance of a missed connection and trip insurance can mitigate or eliminate the financial loss. Another downside is checked baggage. You will have to collect your bags at each cross ticket connection and check them in again for the next flight. On international trips, your multiple tickets will usually get you through customs et al just as well as one, multi-flight ticket. It is possible that some country might demand a different type of visa or some additional permit because you arrive under one ticket and depart under another, then arrive again on ticket two and leave again under ticket one. Try to learn about that before you leave home. With all ups and downs studied, you can evaluate the enhancements and savings of your creative ticketing strategy and decide whether to launch it or lose it. One tip: if the creative ticketing will save you hundreds of dollars, put an airport hotel stay between cross ticket connections. Reducing cross ticket worries and resting between flights is a very nice thing to do for you.

§   Real World Airline Flight Shopping Examples:

¶   Example 1: A flier wants to go from Brisbane to Shanghai and sees this quote in a popular flight search engine: AUD 1747.21 for BNE to PVG return. Not so bad but the flier tries a twist up: Brisbane to Sydney is AUD 138.00 BNE to SYD return and Sydney to Shanghai is AUD 1265.81 SYD to PVG return. Adding the two return flight tickets, the flier gets a sum of AUD 1403.81 instead of AUD 1747.21 and saves AUD 343.40 for a wee bit of extra shopping to develop that twist up.

¶   Example 2: A flier wants to go from Kuala Lumpur to Hong Kong and sees a quote of SGD 962.02 for the KUL to HKG return flight. This flier, too, is not entirely pleased to pay that amount and shops a little more to discover that a return flight from Kuala Lumpur to Singapore is SGD 102.95 KUL SIN and that a return flight from Singapore to Hong Kong is SGD 549.70 SIN HKG for a two ticket total of SGD 652.65 instead of SGD 962.02 and saves SGD 309.37 for a rainy day.

¶   Example 3: A flier in Taipei wants to do some business in Mumbai and punches up a quote of USD 1,803.30 for the TPE to BOM return flight. Also not fully pleased, the flier builds a pair of twist ups because she might benefit from a quick stop in Delhi during the same trip. She discovers that a return flight from Taipei to Delhi is USD 938.30 TPE DEL via KUL and the Delhi Mumbai flight segment is just USD 176.40 DEL BOM return. So she can make that stop in Delhi enroute to Mumbai on matching return flight tickets for USD 1114.70 instead of the single ticket fare of 1803.30 and saves herself USD 688.60 for the effort. BUT, if she forgoes the stop in Delhi and uses a twist up for the Mumbai flight (quoted USD $1,803.30 TPE BOM) she can fly Taipei to Singapore for USD 481.80 on one return ticket and then fly Singapore to Mumbai SIN BOM via CMB for USD 508.20 return which gives her a two ticket total cost of USD 990 instead of the original one ticket quote of USD 1803.30 which saves her USD 813.30 which she can use for an upcoming vacation trip.

¶   Example 4: Kilgali to Madrid using a major brand shows $1,237.80 (USD) KGL MAD as the lowest fare. But booking to Rome the fare is $791.50 (USD) KGL FCO and booking Rome to Madrid is $111.40 (USD) FCO MAD; both using the same major brand flight search engine. The amount saved is $334.90 (USD) buy purchasing two tickets.

¶   Example 5: Lusaka to Bucharest is £925.60 LUN OTP using a major brand booking engine. Lusaka to Istanbul is £624.00 LUN IST and Istanbul to Bucharest is £170.10 IST OTP. Two tickets save £131.50. Going about the same trip a different way Lusaka to Bucharest is £925.60 LUN OTP but Lusaka to Johannesburg is £223.20 LUN JNB and Joburg to Bucharest is £561.97 JNB OTP which saves £140.43.

¶   Example 6: Bangui to Moscow is priced at $3,489.60 (USD) BGF DME but Bangui to Douala is $737.00 (USD) BGF DLA and Douala to Moscow is $1,311.50 (USD) DLA DME which saves $1441.10.

§   NOTE: examples above were all accurate at the time they were accomplshed. Airline routes and fares are constantly in flux so the examples, now, may be inaccurate or no longer available. Nonetheless, the examples will always demonstrate the endless array of creative airline flight shopping possibilities.

Conclusion. The cost of not knowing the air travel industry is twofold. Firstly, you will not be aware of all the shopping, flight and itinerary options available to you. Secondly, you will not be aware that you are moving money from your account to a vendor account when you could obtain the same or better travel values at a lower cost.