Daily Archives: December 14, 2018

Where Have All The Cheap Flights and Holidays Gone?

Not so very long ago, it was always possible to grab a holiday or flight bargain by waiting until the last day or two before departure. Now the game has changed. Here is an outline of the factors which have caused the change.

The main driver for holiday costs up to the 1980’s / early 1990s has been the cost of airline seats. Tour operators had the choice to use scheduled carriers with special IT rates or group rates: but they also had the choice of chartered flights. In both scenarios, they had to make a commitment to a seasonal programme, and built their prices around seasonal yield. Especially in the case of charter flight series, an empty seat on the day of travel was a loss of value.

A well-managed programme allowed a certain number of empty seats (especially in low season) to be an acceptable loss – and one which could be mitigated by seat sales at any price the market would allow. Thus cheap flights, and the holidays which formed part of the packages, were available days before departure for those with a flexible attitude to destination and dates.

As bigger operators took control of all elements of the holiday package, “in-house” airlines took the management of this cost balance to a different level. Their pricing policies – or “yield management” equations – could be handled in the context of overall profit margins of the holiday company as a whole. But it is how these in-house airlines are run which pinpoints a major difference in those policies.

The rise of the so called “no frills” airlines has overturned the old pricing models. They no longer discount the day before you fly. Ryanair and easyJet amongst many others now use a pricing model first mooted by US carrier …

Posted in travel | Tagged , , , | Comments Off on Where Have All The Cheap Flights and Holidays Gone?