Air tickets: Every so often, I am inundated with requests for explanations on the cost of air tickets. Frequently asked are questions about the disparity in costs of airlines departing from and travelling to the same destination. Even within the same airline to the same destination, there may be differences in the cost of tickets. The following ten observations may help make informed decisions as one contemplates travel this festive season.
1. From a sales point of view, the life of a typical flight is a year. It starts one year before departure when tickets are open for sale and closes approximately two to three hours before departure when sales are no longer possible.
2. Airlines operate an inventory system. In this system, a single flight will have multiple price buckets with each bucket allocated a quota of seats. Booking a year in advance gets one the lowest price bucket. As each bucket gets filled, the system opens higher fares and continues to make adjustments upward until the flight is full.
3. Flight prices typically go through a weekly cycle. The lowest prices are made available earlier in the week whilst the highest prices are offered later in the week.
4. Sometimes, like during busy periods, flights sell out faster. Other times, they take longer hence the reason one, on occasion, gets competitive prices closer to departure or high prices on flights that are months away. The laws of demand and supply apply in these cases. When supply is constrained, demand is usually impacted pushing prices up. Airlines use algorithms to manage demand and supply forces by dynamically adjusting prices.
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5. Many international airlines operate a two-class seating configuration; business class and economy (also referred to as coach). Promotional fares and discounts are usually in the economy class segment. This is because it is considered leisure/non-essential travel most of the time and is based on a budget or a whim.
6. Business class travel is considered essential. It rarely has price variations for the following reasons: Business class cabins are small, taking up between 10-15 % of the total seats. Second, the price is already at a premium and as such leaves little room for adjustments. Third, unlike economy class, business class passengers are not price-sensitive. The bulk of their travel is paid for by corporates or big businesses. This market is inelastic and thus does not present a case for promotional fares.
7. Direct travel from a hub to a destination is usually more expensive than travel that involves a transit point. This is because direct travel is more convenient and saves time. Further, transit points may have multiple connections to a destination hence more competition for the same passengers that drives the price down. KQ flights from Nairobi are all direct flights and therefore tend to come at a premium. But they compare very favourably with other direct flights to the same destinations from the competition.
8. A direct flight may include a stop for technical reasons but will still be considered direct if there is no change of aircraft or flight number.
9. Flights within Africa are more expensive than those within other continents. This is because air travel within the continent is not well developed hence, very little competition between relatively few airlines. Sometimes, where there are no direct flights, one has to travel out of Africa through Europe to a destination on the continent.
10. Finally, airlines are allowed to overbook flights by a certain margin, which is meant to cater for “no-shows” and last-minute cancellations. In such instances, priority is given on a first-come, first-served basis. A quick hack to beat this is to utilise the online check-in facility, which is normally open up to 30 hours before departure. Should one find that online check-in is not available, let them turn up at the airport as soon as the check-in counters are open. Usually, this is 3 hours before a flight
Safe travel and safe skies.
Leonard Khafafa
