The Art of Cheap Flights: Behind the Scenes
Does anyone like paying a high price for flights? Barring a few aging fossils who yearn for a return to a rosy, imagined past of exclusivity, most of us don’t.
The world of airfares is largely opaque to most people. They need to go somewhere from their home. On a site like Kayak or Expedia, they punch in their origin/destination info, dates, click, and hope for the best.
That’s not part of James’ Highly Effective Habits of Thrifty Flight Shoppers. It’s an even worse idea for long-term travelers and digital nomads.
Before I delve into the juicy bits of, I want to cover the jargon and technical stuff for the uninitiated. This will save us all time later on. If you’re a veteran travel hacker or industry insider, feel free to skip to the next article.
Hub – An airline’s base (singular or one of many). A hub will frequently be dominated by its carrier. Examples: Delta in Atlanta, British Airways at London Heathrow, and Emirates at Dubai.
O/D – Origin and destination – described travelers who start and end their journey on a non-stop between a city pair. Example: “75% of flyers on BA’s New York-London flights are O/D travelers. The rest are connecting onward.”
Load: The passengers on board a flight, usually a percentage. 75% load = 75% of seats sold.
Yield: Profitability. Distinct from yield in that a full flight may not necessarily be profitable.
Irrops: Irregular operations – when something goes wrong and your flight is cancelled/delayed.
Understanding fare classes
If you thought that this part would be a simple one, you’re wrong. Yes, we’re typically operating on the basis of First, Business, Premium Economy, and Economy fares. Here’s what you probably don’t know: these classes are subdivided by letters – “fare buckets” – that determine price and privileges.
Here is an example of a typical fare bucket breakdown:
- Economy buckets: Y, B, H, M, L, N, V, O, K, X
- Premium Economy: W, T, Q
- Business: J, C, D, I, Z, U
- First: F, A, P
Bold letters indicate “full fare” and italics indicate tickets paid for with frequent flier redemptions (henceforth simply “redemptions”). Non-italic letters are written in left-to-right order of diminishing price and flexibility.
When you search for a plane ticket, your search tool will show you by default the lowest available fare class. If the lowest economy fare bucket is a V, your search for an economy ticket won’t show an M fare. You can specify searches for refundable tickets, but you might get sticker shock. Most fliers are accustomed to the lowest bucket prices. [Example: a full Y fare between the US and Europe can be $2,500 return]
What are the differences aside from price? As you might have noticed from the verbiage of an e-ticket and the attached conditions of carriage, if you bother to even glance at them, you will notice many stipulations about fees, baggage allowances, and so on.
Using economy as an example, a Y fare will be quite expensive (possibly even more expensive than a discount ticket in a business/first seat). However, it will be fully flexible and refundable without additional fees. It will often include complimentary baggage. If applicable, frequent fliers on a Y fare will be the highest priority for an elite or operational upgrade (if overbooked) to business or first class. Also, again if applicable, Y fares are eligible to upgrade with frequent flyer miles.
On the other hand, the reverse is usually true with an ultra-cheap K fare. You’ll pay the minimum price, but extras such as seat selection and checked baggage will often require additional payment. Changing or cancelling the ticket will often be impossible or only allowed with significant fees. In the event of overbooking, you’re a bottom priority for upgrades. In the event of a cancellation, you are the lowest priority for on-ground assistance like re-booking or a courtesy hotel.
Were you able to see a matrix of all available fare buckets and their prices at once, the options would be overwhelming to most. Even by single cabin, it’s amazing to think of how you and your seatmate could have paid vastly different prices depending on time of booking, available fare classes, and desired flexibility.
Location, Location, Location…
…applies to more than real estate!
Suppose you are flying between New York and Taipei via Hong Kong on Cathay Pacific. Sitting next to you on the outbound is a Taiwanese resident returning home after a visit her sister who lives in New York. You’re a New Yorker going to visit Taiwan. You both scored low O class fares. Did you pay the same price?
No! Flights are priced both on the overall route and the point of origin. You might have paid $825 for an economy ticket or $5,200 for a business ticket. She could have paid much more or less depending on how CX saw demand for tickets out of Taipei.
This point-of-origin pricing leads to some fascinating deals out there. Certain favorites include $1,400 business class round trips from Colombo, Sri Lanka to the US on the Middle East Three (Emirates, Etihad, Qatar) or $1,900 trips in business class from Canada to South Africa. Both of these represent discounts of thousands of dollars less than the global average for tickets to those routes. Try pricing San Francisco to Cape Town or Dubai to Atlanta if you doubt me.
Competitive Bloodbaths Mean Savings for You
Have you noticed how much flight prices in the US suck? Do you hate your friends who mention that their ticket from Paris to Munich was $50 when your ticket from Lexington to Atlanta was $500? Do you thus find yourself staring skyward and curse creation as you part with hundreds of hard-won dollars for often dismal service on US carriers, wondering how your $200/hr ticket doesn’t even get you a whole can of seltzer?
Oh child, things may not be getting easier any time soon, but allow me to dispel the darkness!
There’s been a whole lot of consolidation in airline travel. First, Delta ate Northwest. Then, American merged with US Airways. Finally, United united with Continental with such acrimony that even a veteran divorce lawyer would have winced.
The result? Fortress hubs and lack of competition on certain peripheral routes leading to astronomical fares for the captives. On the other hand, America’s tier one cities/destinations enjoy rock bottom fares due to brutal competition. Some of the best fares on the market right now are New York-LA and LA-Honolulu. However, others are quite expensive for the flight time. The 1-hour flight between Montgomery AL and Atlanta is $225 on Delta (round-trip) with hand baggage only.
Stay tuned for more, and don’t forget to subscribe below!