Trav­el­ers love air­line flash sales but the ul­tra-cheap fares are on the de­cline

Tehran Times - - HERITAGE & TOURISM -

The Twit­ter ad seemed too good to be true: fares start­ing at $20 on JetBlue Air­ways.

A few hours af­ter the ad ap­peared Tues­day on the so­cial me­dia site, it was gone, leav­ing wanna-be trav­el­ers frus­trated that they missed the re­mark­able deal.

Those who clicked too late ended up on a page ad­vis­ing: “This pro­mo­tion has ended. Act fast! In some cases, a fare may not even last an hour.”

Such “flash” sales are a tra­di­tional tac­tic used by the air­line in­dus­try to fill empty seats dur­ing slow travel pe­ri­ods and lure trav­el­ers to an air­line web­site where they may be tempted to book a more ex­pen­sive flight.

Air­lines also have used flash sales to in­flict eco­nomic pain on ri­vals. Cut­ting prices on routes dom­i­nated by com­peti­tors of­ten forces the other air­lines to try to match the lower fares.

“It’s like kids in the air­fare sand­box, fight­ing,” said Ge­orge Ho­bica, a fare ex­pert and pres­i­dent of Air­fare­watch­dog.com.

But such flash sales are on the de­cline, in­dus­try ex­perts say, partly be­cause the air­line in­dus­try has be­come more con­sol­i­dated through merg­ers and ac­qui­si­tions, which has di­min­ished com­pe­ti­tion and re­duced the need to un­der­cut ri­vals with lim­ited-time fares.

And with de­mand for travel reach­ing record lev­els, car­ri­ers can sell seats with­out re­sort­ing to deep dis­counts.

Flash sales are also used less of­ten to­day be­cause so­phis­ti­cated com­puter pro­grams have made air­lines more ac­cu­rate at es­ti­mat­ing the num­ber of seats needed for a par­tic­u­lar route so that empty seats are more rare.

“They can man­age in­ven­tory more tightly,” said Richard Go­laszewski, a se­nior econ­o­mist with GRA Inc., a Penn­syl­va­nia-based avi­a­tion con­sul­tant.

That means trav­el­ers look­ing for deep dis­counts are go­ing to have fewer op­por­tu­ni­ties to book a bar­gain seat.

Since 2008, the na­tion’s big­gest car­ri­ers have been buy­ing smaller or weaker com­pet- itors, so­lid­i­fy­ing their dom­i­nance in spe­cific mar­kets and hubs through­out the coun­try.

For ex­am­ple, Delta and its re­gional car­ri­ers fly nearly 80% of all pas­sen­gers who travel out of the na­tion’s busiest air­port, Harts­field-Jack­son Atlanta In­ter­na­tional Air­port. Amer­i­can Air­lines car­ries nearly 85% of all pas­sen­gers at Dal­las-Fort Worth In­ter­na­tional Air­port. United Air­lines is dom­i­nant in Ne­wark Lib­erty In­ter­na­tional Air­port, flying about 51% of all pas­sen­gers who use the New Jersey air­port.

Com­bined, Delta, United, Amer­i­can and South­west Air­lines con­trol more than 70% of all do­mes­tic flights in the U.S.

Strong de­mand for travel and so­phis­ti­cated com­puter pro­grams have en­abled air­lines to reach record rates of oc­cu­pied seats per plane, known as the load fac­tor. Com­mer­cial flights flew with an av­er­age of 82% of all seats filled in 2016, com­pared with a rate of 72% in 2002, ac­cord­ing to the most re­cent fed­eral data avail­able.

The com­bi­na­tion of these fac­tors mean less com­pe­ti­tion, fewer empty seats and lit­tle ur­gency to dis­count tick­ets to fill planes.

“Air­lines ac­tively man­age their flights and ca­pac­ity to meet, but not ex­ceed, mar­ket de­mand,” said Henry Harteveldt, a travel in­dus­try ex­pert with At­mos­phere Re­search Group.

Flash sales are now used pri­mar­ily by low-cost air­lines, such as JetBlue, as they con­tinue to bat­tle with the ma­jor car­ri­ers to win greater shares of the coun­try’s most pop­u­lar mar­kets and hubs.

A JetBlue rep­re­sen­ta­tive de­clined to com­ment on the car­rier’s use of flash sales.

But in­dus­try ex­perts say the re­stric­tions im­posed on such sales are so nu­mer­ous that the goal is not to make money from the low fares but to boost pub­lic­ity and in­ter­est in the car­rier.

“From a mar­ket­ing per­spec­tive, you want to get [Face­book] likes or vis­i­tors or Twit­ter fol­low­ers,” said Rick Seaney, who heads fare com­par­i­son site Fare­com­pare.com.

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