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Business & Technology

Airfares are all over the radar screen

October 6th, 2007 12:00 am by Hank Hayes

Airfares are all over the radar screen



Let’s say you’ve purchased a round-trip plane ticket going to Dallas flying out of Tri-Cities Regional Airport on Delta Connection for about $500.


What may upset you is the guy sitting next to you on the plane may have paid much less.


But another traveler a couple rows back may have paid much more.


You can forget the notion that all boarding passes cost the same. Airfares today are all over the radar screen.


Some routes are also more expensive than others. Flying to Los Angeles, for instance, can be cheaper than flying to Washington, D.C., from TCRA, according to airfare search engine FareMeasure.


The practice of pricing airline tickets is literally a computer science called “yield management,” according to veteran Johnson City travel agent George E. “Skip” Oldham III.


“What the airlines are trying to do is get the most money per seat they can get without violating their advertisements,” Oldham explained. “They will say there is a fare at $59 someplace but that fare is not for every seat. It’s for a certain number of seats on a given aircraft ... the reason that you see such a variation in fares and so few really low fares in the Tri-Cities is because the planes are of a smaller capacity. You take a 100-passenger plane and you may have 10 seats for that low fare, or you may have five or less.”


Finding a competitive airfare can be a simple task for frequent travelers but can also intimidate those who don’t fly that often. The airfare price numbers in the services used by travel agents and the various Internet search engines move up and down quickly.


“It is estimated that there are 200,000 fare changes a day,” said Oldham. “(Airlines’) yield management has computer programs that they can tell as people start inquiring about (flights) ... and if there is a lot of activity in there, then they are going to bump (prices) up. If no one takes those seats at the higher price, say, within 10 to 20 minutes, they drop back down. So you can come in here and we’ll tell you what a fare is right now, and someone else can come in here in 10 minutes from now and that fare could have gone down.”


Cost information trends suggest travelers hold the upper hand for now amid high fuel prices. Average airfares through the first quarter of this year remained well below pre-9/11 highs, according to the Bureau of Transportation Statistics (BTS). The average domestic fare in 1995 was $391 compared to $379 this year, BTS said.


BTS cites three reasons why price inflation hasn’t taken hold of airfares. First, low-fare carriers now carry more than 27 percent of all domestic passengers, up from about 14 percent in 1995. Secondly, the major carriers have changed their “Saturday Night Stay Rule” allowing passengers more flexibility.


The third reason is that Internet use allows almost instant price comparisons.


TCRA competes with price-sensitive Internet travel services like Orbitz, Travelocity and Expedia by having its own online booking engine (www.triflight.com). Even travel agencies like Oldham’s do the same thing (at www.oldhamtravel.com).


“We’ve done that to compete, but we’ve also done it because people want it,” Oldham said of his agency’s Internet booking engine. “Younger people, they are not intimidated whatsoever with a computer. But we had a lady yesterday and I asked her ‘Do you have Internet capabilities?’ (She said) ‘No, I don’t want it.’ She was one of these people who had to see who she was talking to.”


Oldham said there is a customer service downside to using some of the major Internet booking engines.


“If something happens, there’s nobody to help you. They’ve got your money,” he said. “Then ... people are left on airplanes for hours ... customer service is mostly offshore in the Philippines, India or South America.”


Of the airlines using TCRA, Oldham indicated low-fare Allegiant Air is attracting the most attention from travelers. Allegiant bundles its flights from TCRA to Orlando with hotel room and rental car bookings.


Allegiant has been advertising fares as low as $59 one-way, but that’s just a base airfare, Oldham noted.


“They have more of the cheap fares, but ... it might go from $59 to $99 to $109 to $159,” Oldham said. “You’ve got a base fare, then you’ve got a tax (passenger facility charge), then you pay $6 per bag (for bag handling) and $11 per reserve seat.”


Despite all of the various economic factors affecting airfares, Oldham said some of the old rules to getting a good deal still apply.


“The further out you can book (a flight), the better you are going to be,” he said. “You can book airfares out 330 days ... the sooner you know about it, that is when you are going to get your best deal. Walk-up (airfare) is still the worst deal or anything under two weeks ... if you try to buy a one-way fare, they are just outrageous. That’s like the same as a walk-up.”


Choosing an airport, Oldham added, can also be as important as selecting an airline for the best deals.


“Right now, Tri-Cities and Knoxville fares are considerably higher; Chattanooga is still low,” he said. “Knoxville has more capacity and more direct flights, like a non-stop to (Chicago) O’Hare ... Asheville has two Continental flights to Newark and Houston.”


In the near future, travelers can expect a buyer’s market for airline boarding passes.


The Air Transport Association (ATA), the group representing the nation’s larger airlines, claims that price competitiveness is one reason that air carriers are projecting a $5 billion net profit this year after losing more than $35 billion between 2001 and 2005.


“Adjusted for inflation, fares are roughly half of what they were in 1978, while the cost of cars, drugs, stamps, college tuition and gas have surged,” ATA President and CEO James C. May testified during a recent appearance before a House subcommittee.



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