Where did all the bargain fares to Europe go?

by George Hobica on

Will this be the summer of our discontent when we search for cheap airfares to Europe? Is the party over?

In January 2009, US Air kicked off the summer selling season with tax-included fares for peak summer travel to Europe in the $500’s and $600’s but that was nothing compared to the $200 and $300 fares that appeared later in the spring and summer.

But that was last year. The winter just ending is the first time in memory that we didn’t see dead-of-winter deals to Europe. In winters past, the airlines went into panic mode, selling fares for February travel for as low as $250 or $300 round-trip including taxes, even on nonstops from New York to Paris. This winter, however, fares remained stubbornly stuck in the $600’s, $700’s and even $800’s to most destinations, although there were a few fleeting $500 bargains to such places as Dublin, Barcelona and Madrid.

Even Frankfurt, typically the cheapest gateway to the Continent, saw no amazing deals as in past winters.

So what’s going on here, and how does this bode for travel this spring and summer?

Of course, only fools dare to predict how an irrational airline industry will react, so we’ll steer clear of hard and fast prognostication. However, the bargain-less winter does not give us much hope.
But we will say this: many European governments have increased airport taxes, as outlined in this New York Times article on the subject, which reports that a $458 fare from New York to London recently came saddled with $162 in taxes and government fees.

And it may only get worse. The British government, for example, currently adds an Air Passenger Duty of £45 in economy class, but this will rise to £60 on Nov. 1, and £90 on business and first class fares, scheduled to increase to £120 on the same day.

In addition, many airlines have cut capacity and grounded jets for the duration, which will put pressure on fares. Last July, British Airways announced it would slash winter capacity by 4-5%, grounding over a dozen planes.

Adding to our misery, the weak dollar has enticed bargain-hunting Europeans to visit the U.S. Those shopping bag-toting hordes are driving up demand and fares along with it, taking seats that we were hoping to get for next to nothing.

Currently, spring and summer fares to most European destinations are running in the $900 to $1500 range, including tax. That’s still less than what we saw in summer 2008, when it wasn’t unusual to cough up $1900 and $2000 on economy class fares for peak July and August dates. Even so, we would be very surprised if at some point there isn’t a brief, hit-and-run sale on some routes. So our only advice is to sign up for fare alerts (http://www.airfarewatchdog.com/fare-alerts/) and jump if such a sale does come to pass.

George Hobica is the founder of Airfarewatchdog™, the most inclusive source of airfare deals that have been researched and verified by experts. Airfarewatchdog compares fares from all airlines and includes the increasing number of airline-site-only and promo code fares.

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Everything you need to know about buying airfares as cheaply as possible, in 500 words or less.

by George Hobica on

If I could tell you just one thing, it would be this: sign up for free fare alerts. Time and again, I see articles whose main point is to crown one search engine-Kayak, or Travelocity, or Momondo or whatever-as the best bet to find a low fare. But usually, the price differences in these “bake off” comparisons are small potatoes, if they exist at all, because all airfare sites pretty much use the same fare data provided by the airlines. That said, meta search engines such as Kayak and Tripadvisor will do a better job at finding the relatively few fares that the airlines sell only on their own sites.

There is no one “magic bullet” airfare search site! The only sites that perform better on international fares are those selling “consolidator” fares, but these often come with caveats and extra restrictions, such as “miss your flight and you have to buy a whole new ticket” (you get what you pay for).

The big savings come from realizing that airfares can have wild and sudden swings, like stocks on the S&P 500. You may not have time to check them hour-by-hour or day-by-day, but airfare-tracking sites do, and will alert you when a fare goes down, sometimes by hundreds of dollars, either to a level you specify or by a percentage amount.

So sign up, it’s free! Some alert systems require that you first search for a fare before they’ll offer free email alerts; others let you sign up before searching. Here are some sites that offer alerts:TripAdvisor.com
Kayak.com
Yapta.com
Bing.com
Travelocity.com
Orbitz.com
Airfarewatchdog.com

Don’t just sign up for one, because they all work a bit differently. Be aware that most don’t include Southwest Airlines fares or promo code fares (airfarewatchdog.com does, although it tracks far fewer routes than the others listed above).

And do sign up for the airlines’ frequent flyer programs and email alerts. They’ll often send out promo code and airline-site-only fare deals.

Also, if you’re searching on your own, do not forsake online travel agencies! Way too often I hear people exclaim, “I only buy directly from the airline sites.” But what if you can save $100 by flying out on Delta and back on United? Who’s going to tell you this? Delta? United? Not a chance. Travelocity, Orbitz, Cheap Tickets, Expedia and other online travel agencies are going to tell you this.

You already know that being flexible in your travel dates saves money. Problem is, most people are not flexible in their travel dates. Even so, Travelocity, Cheaptickets, and Orbitz have the best flexible date search functions (check out this helpful chart).

Is there a magic day to buy? A lot of sales pop up on Monday night and Tuesday, but the fare you’re looking for could go down at any moment, so if you just search once a week on Tuesday, you’re missing out.

Traveling at the last minute? You usually have two options: pay through the nose, or use Priceline.com or Hotwire.com. Priceline’s name your own price feature is a super way to snag a good last minute fare.

Oops, that was more than 500 words, but just by a bit. One more tip: keep your seatbelt fastened whenever you’re in your seat and you’ll enjoy your fare savings even more.

George Hobica is the founder of Airfarewatchdog™, the most inclusive source of airfare deals that have been researched and verified by experts. Airfarewatchdog compares fares from all airlines and includes the increasing number of airline-site-only and promo code fares.

Want more travel news? Be sure to check out Episode 2 of Gadling’s Travel Talk TV!

Lies, damned lies, and airfare statistics

by George Hobica on

Recently, I was asked by a news service if Airfarewatchdog would be interested in providing airfare statistics on various routes to compare average airfares from month to month and year to year.

I don’t think this was the answer they were hoping for, but this is what I told them:

It’s really, really hard to get accurate, meaningful airfare statistics. In fact, it’s pretty much impossible. There are so many different types of fares sold, such as consolidator (bucket), corporate, and negotiated fares, in addition to published airfares. And airlines do not divulge, for competitive reasons, how many seats they actually sell at what fares on what routes. The airlines’ published fares are public record, and they do report overall revenue figures for the airline as whole, but ticketed fares route by route, or airport by airport? My friends who are airline insiders tell me it’d never happen.

As Singapore Airlines spokesperson James Boyd explains, “When an airline launches a sale, it’s an attempt to grab market share. An airline would never publicize how many seats were sold at what price on what routes, because it would give competitors too much information.”

The best one can do is to compile sales data from large ticket sellers, such as Expedia, Travelocity and Orbitz, route by route, and figure out what consumers actually paid for their tickets over various time periods. Still, this data will not include all fares sold to the public (in addition to the fare types mentioned above, airlines are increasingly selling special promo code fares on their own web sites in order to drive web traffic and undercut the third party online agencies). And none of the online travel agencies sell Southwest Airlines’ or Allegiant Airlines’ fares, so that’s another missing piece of the puzzle.Most importantly, beware of anyone offering fare statistics if they do not sell seats. There is a huge difference between published fares and ticketed fares.

“Sold versus published does provide a better window into the real world,” confirms airline industry consultant Bob Harrell of New York City-based Harrell Associates. “It’s just harder to get [the] data.”

For example, in January American published fares from Delta’s US hubs to Lima, Peru for $330 return, including all taxes. These routes are normally twice that or even higher. A source that merely tracks the ups and downs in published airfares might report that fares on that route came down over 50% in January 2009. But is that accurate? How many seats were sold at $330 during this unadvertised sale? How many at $500? How many at $600? How many were sold through consolidators on that route in January? Just because the published fare went down to $330 for a brief period, doesn’t mean that the average fare on that route paid by consumers was $330. There’s simply no way of really telling, unless you can aggregate data from each airline serving the route, and the airlines are not going to share this information, because it will give competitors too much information.

As a journalist, it makes me cringe when I see a news report stating that “Airfares went down 15% year over year,” without revealing the methodology for determining that statistic and all sources providing data. Was that published fares or ticketed fares? If ticketed, what was the source? If published, how was the statistic calculated? And did this include taxes and all ancillary fees paid by passengers on that route, from that airport, or during that time frame? Unless a source or journalist shares all this background information, airfare statistics are, if not exactly lies, meaningless and misleading.

George Hobica is the founder of Airfarewatchdog™, the most inclusive source of airfare deals that have been researched and verified by experts. Airfarewatchdog compares fares from all airlines and includes the increasing number of airline-site-only and promo code fares.

A memo to airline passengers

by George Hobica on

If you don’t want to pay what it’s worth, then stop whining about air travel.

I won’t take credit for that pithy remark. It was made by a travel editor friend of mine, the New York Post’s David Landsel, over Thanksgiving dinner.

But it’s been ringing in my ears ever since.

Because let’s face it: we’re not paying enough for commercial air travel. Airlines have cut costs to the bone, slashing pay, eliminating services, deferring new planes, hedging jet fuel purchases, and all the rest. And yet they’re still losing billions.

But while the cost of most everything else we buy, in inflation-adjusted dollars, has gone up (notable exceptions being things like TVs and phone service), the price of air travel has gone down over the last several decades.

Back in the early 1960’s, when a gallon of gas cost 29 cents, a flight from New York to LA could be bought for as little as $250 round-trip. Today, you can fly that route for as little as $178 round-trip when there’s a cutthroat sale going on, but that gallon of gas costs 10 times as much. A brand new Ford Pinto cost $1999 in 1972. And that $250 flight, in 1960 dollars, works out to about $2200 in 2009 greenbacks.
For some odd reason, and I’ve never heard a rational explanation for this, North America’s airlines can’t seem to price their product at what it actually costs them to deliver it.

Experience has shown them that when they raise fares to profitable levels, people simply reduce their flying, and that impacts the entire travel industry-hotels, rental cars, attractions. Because, let’s face it, most air travel is discretionary. Few people have to fly to Hawaii unless it’s to a funeral or to attend college.

And so instead of raising prices, airlines have cut costs, wages, seat pitch, and perks such as meals and pillows. And that’s resulted in cramped and dirty planes, cancelled routes, and grumpy employees and passengers. But what, exactly, do you expect when you pay more for the round-trip taxi ride to the airport than for your flight to Chicago?

Look, I’ve built a career and an award-winning airfare web site on telling people about insanely low airfares. And I love my work. But honestly, when I see a $98 round-trip fare from New York to Denver, I shake my head, and I feel a little guilty. Am I helping the situation by telling folks about how desperate the airlines can get sometimes? It’s like stealing candy from a baby, not that I’ve ever done that. Or at least I don’t think I have.

One way that the airlines are trying to achieve pricing power, frankly, is by reeling consumers in with ridiculously unprofitable fares and then hitting them with all these new fees for checked bags, pets, itinerary changes, and frequent flyer ticket redemptions. But even that hasn’t returned them to profitability. All it’s done is generate thousands of newspaper headlines. Speaking of which, enough about those holiday surcharges already! So the airlines are trying to lose a little less money. Give them a break!

Eventually, and who knows when, the party has to end. Fares need to go up, or we’ll see more airline mergers and Chapter 7 filings. And then fares really will go up. But meanwhile, perhaps it’s time to face reality. Sure, air travel isn’t fun anymore. Sure, it’s a PITA. But just as surely, as crappy as it is sometimes, this is what you and I told the airlines we wanted by voting with our wallets. So maybe we should all just stop whining or get used to paying a fair price for airfare.

George Hobica is the founder of Airfarewatchdog™, the most inclusive source of airfare deals that have been researched and verified by experts. Airfarewatchdog compares fares from all airlines and includes the increasing number of airline-site-only and promo code fares.

Why people aren’t flying. (Hint: It’s not just the fares)

by George Hobica on

Think that all airlines are losing business during the recession? Not quite. Southwest Airlines and JetBlue Airways saw their traffic jump 9 and 10 percent, respectively, in September, while United’s was down 6 percent. Other airlines suffered traffic declines as well. Could it be that consumers are flocking to airlines known for having better service (e.g., JetBlue’s extra legroom, free snacks, and live TV) and lower fees than most of their competition (Southwest has lower fees across the board where they do charge a fee)? Is one reason the airline industry is in such dire shape because the product has deteriorated to the point where people just don’t want to fly at any price?

A recent reader poll by Consumertraveler.com crowned Southwest as respondents’ favorite airline, with 71 percent saying that service was the reason why. The same poll revealed that “comfortable seating” was the main reason consumers who chose JetBlue as their favorite did so.

Airlines are losing money ($11 billion worldwide this year, according to one estimate), fewer people are flying, and, despite capacity cuts, the average fare paid is going down. Now one would think that if you have fewer seats to sell you’d be able to charge more for those remaining. But while scarcity pricing works in most other industries, it appears not to in air travel. The airlines park planes in the desert, but fares stay the same on most routes or go down (depending on which statistics you believe, average ticketed fares have fallen about 20 percent this year compared to last, far more than prices have dived in most other industries). So why is there insufficient demand for air travel?Sure, the recession is part of it. And, let’s face it, most travel is discretionary. Other than attending funerals and weddings, visiting dying relatives, going off to college, or making mission-critical business trips (a technician traveling to repair an ailing nuclear plant), flying somewhere is simply not a life and death affair. Vacationers can stay home, drive, or take the bus. Business folks can seal deals by phone or email, or videoconference, even though doing so is usually less effective.

Airfarewatchdog believes that a lot of people aren’t flying because, to put it bluntly, flying is a big PITA. If air travel were a better experience, we believe, more people would take to the skies, even at higher fares. But, of course, improving the product will cost money that the airlines don’t have and we’d all have to pay higher taxes to fix our antiquated air traffic control system.

To test our theory, we’re running an admittedly unscientific poll asking readers, “If you aren’t flying as much as you used to, what’s the number one reason why?” The options are:

  • “Fares are too high”
  • “I’m afraid of losing my job”
  • “Air travel is a pain what with all the delays and fees”
  • “None of the above”

With over 1500 responses so far, 44 percent have answered that fares are too high, but almost as many (41 percent) aren’t flying because it’s just a big fat bother.

But it’s not just the raw numbers that are interesting. We also asked for comments, and that’s where things get revealing. I think we got one email complaining about high fares (not surprising since fares are trending down), but dozens lamenting the sorry state that air travel finds itself in. People are, to put it mildly, fed up.

Paul Schrodt writes from Columbus, OH, “I used to fly during the winter months to Florida. Now, because of fees and other airline shenanigans I just drive, and enjoy the trip a whole lot more. Let’s let the airlines suffer until they come to their senses again!” Whew.

To be fair, several respondents complained about hassles beyond the airlines’ control. Joseph Kraatz of Oceanside, California, spoke for many when he wrote, “By the time I drive to the airport, find a parking space, get to the terminal, then go through the ridiculous inspections, I have wasted 3 hours. I can drive to Las Vegas in six hours and arrive way before my flight. Is there something wrong with this picture? You bet there is. People should completely stop flying on trips of anything less than 1000 miles.”

But others have stopped flying simply because it’s an uncomfortable experience. “Airlines have crammed more seats into their flying aluminum cans,” one reader laments. Another gripes that seats are “as thin as cardboard” and that he has taken to riding the bus for trips of less than four hours. “The bus seats are much more comfortable and the travel time is comparable. I also get to see a bit of the country side and I’ve yet to have a bus fail to leave the terminal on time.”

But perhaps the reader who summed it up best was the one who simply noted that, “flying just isn’t fun anymore. It’s an ordeal–uncomfortable, crowded, and unhealthy.”

So what’s the answer? Re-regulation? Higher fares? Fewer airlines? Allowing foreign carriers to serve domestic routes (imagine flying Singapore Airlines nonstop from New York to LA)? One thing is clear: airlines can’t go on forever losing billions. Something has to give. And until airlines are profitable again, they probably can’t afford to make flying with them a more pleasant experience. You want friendlier airline staff? Stop cutting their pay and benefits. Comfier padded seats? That will burn more jet fuel, so be prepared to pay for it. And so on.

Even I don’t fly as much as I used to. I travel frequently between my home in New York City and Boston, sometimes more than once a month. And although I created a site called Airfarewatchdog, I usually take the train. The only thing that enticed me to fly recently was a sale on JetBlue combined with a 20 percent promo code discount, bringing the tax-included round-trip fare to $66. But on the train I get more legroom, two-by-two or even single seating, no lines, no hassle, and because I travel the route often, free upgrades to first class, where I’m served a hot meal at my well-padded seat by friendly attendants. It’s almost like flying…used to be.

George Hobica is the founder of Airfarewatchdog™, the most inclusive source of airfare deals that have been researched and verified by experts. Airfarewatchdog compares fares from all airlines and includes the increasing number of airline-site-only and promo code fares.