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Shouldn't the Economy be Driving down Airline Tix Prices?

Shouldn't the Economy be Driving down Airline Tix Prices?

Jul 12th, 2001, 03:47 PM
  #1  
ilene
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Shouldn't the Economy be Driving down Airline Tix Prices?

I am not an economist but I am surprised to see that prices of flights to Europe have not dropped more dramatically. I am interested in traveling in September to Paris or Rome and figured by now I'd be able to find a great deal. Using all the usual routes (expedia, orbitz, etc.) I haven't been able to find anything lower than about $550 from Boston. Have you all found any less expensive flights for the fall? Am I looking too early? I would think the economy would severely impact leisure flights, if not business flights. Let me know if I am missing any great deals. Also I am curious, is anyone else feeling like they should lay off (no pun intended) their travel for a little while? Seniors who will gloat that they have worked and saved up great piles of money need not reply.
 
Jul 12th, 2001, 03:53 PM
  #2  
Rex
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I think that computer predictions have made an incredibly good "science" out of learning how to get the maximum price from available seats without offering any more low-priced seats than absolutely necessary - - to avoid "throwing away" their "perishable products" (i.e., flying with empty seats).

And the word has spread throughout the traveling public VERY efficiently - - Europe in September is one of the MOST desirable seasons.

Best wishes,

Rex


 
Jul 12th, 2001, 03:56 PM
  #3  
mikey
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Another reason is that airlines are offering sales that have short durations (just a few days). Also they know they can wait until the last minute and offer a sale via the traditional way or do internet sales.
 
Jul 13th, 2001, 09:11 AM
  #4  
JW
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I've also been surprised by the lack of sales for September.

My wife and I were planning a May trip to Paris (from our hometown near Atlanta). In March, there were sales for May for around $540. But then we had to reschedule the trip for later in the year.

I assumed similar prices would be available in September. But as of today, the lowest is over $900. I called a local travel agent, and they can get seats via a consolidator for $743. We may have to go with this.

It's now 9 weeks before we hoped to leave. So we don't want to wait too much longer.
 
Jul 13th, 2001, 09:20 AM
  #5  
ron
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There are two ways for airlines to deal with reduced demand; 1)lower prices, which is what we all want or 2)reduce the number of seats flying, which I imagine they are starting to do as they realize the recession is not going to be so short-lived.
 
Jul 13th, 2001, 09:43 AM
  #6  
Bob Brown
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My economist friend tells me that the relatively large number of retired people, whose incomes are not immediately affected by the "minicession", are keeping the demand for trans Atlantic fares fairly consistent with last year's demand.
Also, a major portion of the segment of the population that books flights to Europe in the summer months has not felt much of the sting from corporate layoffs, yet. True, reduced corporate profits have chilled the stock market, until yesterday, but many companies are still reporting profits, even though they may be somewhat reduced over historically high levels.
Another factor is that the dollar is still strong relative to the euro, Swiss franc, and eastern European currencies.
It has even gained a little ground on the British pound. ($1.40 for a pound today July 13 rather than $1.52 about a year ago.
And 7.4 to 7.6 French francs for $1.00 (US)is about like last year.)
So for me (retired) it is Europe going business as usual.
 
Jul 13th, 2001, 10:15 AM
  #7  
Micaela
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Congratulations on finding a flight for $550! I am paying $827 for my trip to Spain the first weekend of September. That was after much looking!! At first I was finding flights for between $900 and $1150!! Shocking!
 
Jul 13th, 2001, 10:16 AM
  #8  
Micaela
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By the way.... that is out of New York/JFK.
 
Jul 13th, 2001, 10:28 AM
  #9  
rand
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I was watching for a flight to Paris from Vancouver for September. The prices dropped in May due to the 'foot and mouth' scare and we pounced. By June the same flight had risen $200. Now there are no seats available on that airline. Is there a science to this or dilligance and dumb luck.
 
Jul 13th, 2001, 10:52 AM
  #10  
John
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In addition to the US economy remaining strong and the European economies beginning to warm up, the airlines have had to deal with big spikes in fuel costs and political/social impacts on tourism (mad cow, hoof & mouth et al) as well as people deferring or switching destinations because of feared strikes (which didn't happen mostly.)

Overriding all of this, though, is the sophistication of the airlines' financial management and forecasting systems, which are able with wizard efficiency to squeeze the last escudo out of the traveling public. See http://www.qantas.com.au/company/factfiles/yield.html for a nice plain-language example from Qantas. Bottom line, the airlines will charge as much as they need to optimize returns on investment.
 
Jul 13th, 2001, 11:12 AM
  #11  
Peg
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I still sing the praises of Priceline.com. If you are sure of trip dates and just want to get there (aren't particular about carrier), you can get a great deal. I got tix for mid September to Paris from Atlanta for $400 round trip on US Air. I've made many trips to Europe this way and have always had great, inexpensive flights! Just remember, no changes and no refunds!
 
Jul 13th, 2001, 01:55 PM
  #12  
lisa
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Ilene -- I haven't seen any great fares to Paris or Rome, but USAirways is having a sale to Brussels. I think the price if you book online is $379 from Boston to Brussels, roundtrip, but that does not include tax. From Brussels you can hop a train to Paris and that doesn't take very long; I think my train ticket between Brussels and Paris was around $68 roundtrip for the restricted one that could not be changed.
 
Jul 13th, 2001, 02:11 PM
  #13  
Julie
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Even with all the sporadic deals that have been announced, I thought September was still considered what they call "shoulder" season. Which in turn can explain prices going either way. Obviously from the previous responses people have been able to come up with reasonably good fares - but it sounds like they were extremely tenacious in searching them out.
 
Jul 13th, 2001, 02:18 PM
  #14  
phil
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I'm not an economist, but I do work with several fairly closely.

Pricing is is a mechanism to maximize profit which is derived from matching demand and supply. In the case of air travel, demand is measured by demand at price, not overall demand.

Europe is popular in September and the tourist destination competition is limited as the Caribbean is in its low-season. The question is how many people would be are willing to "pay-up" rather than run the risk of not getting on a flight and getting to their destination. Fares are set-off that number, not off consumer demand.

For example, let's say you are trying to fill 200 seats. At $550, I may fill all 200. My revenue is $110,000. However, at $900 I only need to fill 122 to make $110,000. I probably know, from past history, that I'll get at least the 62% of "normal" demand in a downturn.

Cheaper fares will likely become available at the end, but AFTER, the demand at any price is met.

 
Jul 13th, 2001, 03:22 PM
  #15  
Candace
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I agree with minimn last year three of us flew from Chicago to London for a $325 bid a piece on Priceline in July.
After taxes it came to $400 a piece and I purchased them 6 months ahead. If you read the rules and understand them you can get good deals. We flew via Air Canada and it was a great airline I would have never thought to check.
 
Jul 13th, 2001, 08:19 PM
  #16  
Maggie
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Try either Priceline or Expedia. At the moment, Expedia has a $503 rate from the West Coast to Paris (that's including taxes). My guess is that this is with US Air.

Also try an airline that is "repositioning". E.g. Air New Zealand flies around the world, but it gets it passengers mostly on the legs from London to New Zealand and New Zealand to Los Angeles, so that leaves the LA to London leg which you can get for as low as $350, depending on the season. Believe that the September rate is $480. This is West Coast to Europe prices. A consolidator that deals with Air New Zealand ( it's one of my favorite airlines) is rebeltours. Check out their website for other deals.
You might find some really good deals from airlines, such as Kuwait Airlines, that are just passing through Europe on their way home.
Happy shopping!
 
Jul 14th, 2001, 05:18 AM
  #17  
Jim Rosenberg
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Leaving out individual exceptions, my impression is that average leisure fares are down substantially this summer and lower sale prices have been showing up earlier and more often. It remains to be seen if the fares will get down as low as the lowest prices for certain periods and destinations as they did later last year and early in 2001. Airline profits and projections certainly don't look very exciting in the near-term. It's been sporadic in terms of European destinations, but people are finding some deals, as has been pointed out.
 
Jul 14th, 2001, 06:30 AM
  #18  
Frogntoad
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I'm dismayed that I have to pay $751 for a flight to Manchester, England this summer. I thought tourism was way down in England, but the airfares don't show it. When you have school-aged children, you are good and truly stuck. Even my fav discounter, DER, in Chicago wasn't offering ANY deals.
 
Jul 14th, 2001, 08:48 AM
  #19  
Jim Rosenberg
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Been there, Frogntoad. While everyone has to make their own call on these things, ours has been to make use of those ubiquitous "teacher convention" days, etc. to cobble together trips during less pricey seasons and then add a couple of days out of school. It's easy to knock $1,000 or more off the cost of the experience among the family that way and travel is as valuable of an educational experience (or more) than the few days that will be missed (with lessons made up). True, this doesn't work for people who believe that they need to spend WEEKS in Europe to make the trip worthwhile, but we've never felt that way about it anyway.
 

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