I held off booking a flight from Heathrow to Chicago by a week as my preferred carrier LX was not showing availability. A few days later airlines have hiked the fares by 35%. This is across the board and for all travel dates except for the truly dire within Star (SK and LO seem to be the only options to get a discounted Business Class flight). There appear to be no agent/consolidator discounts available anymore.
Have looked at other routes and markets, SK is offering an Economy "special" to BKK for GBP757.
What is happening here? I realise fuel prices are rising and many 1W airlines are suffering reduced demand (LH recently put out a profit warning) so they may be changing their strategy to pursue profit rather than chasing revenue. However, empty seats surely translate into losses as I cannot see the demand being there on these routes or premium flyers who would have gone for Business class will downgrade.
On the Chicago route I have looked at other options as perceived wisdom is that there is a premium for flying out of LHR, but all European markets are at equivalent fares. A Whiff of oligopolistic price fixing here?
LondonCity - 19/10/2011 13:29 GMT
It always helps if you can provide dates of travel as fares can vary so much depending on the day/month of travel ...
I can't comment on Chicago but Bangkok is generally expensive with any of the European carriers. Have you tried EK/EK/QR ?
One reason, besides Thailand's popularity with tourists (although the current floods may put a damper on this over the coming weeks/months) is that Bangkok is a popular stopover en route for Australia/NZ and, of course, we are now running into the busy season for travel to that part of the world.
MarcusUK - 19/10/2011 14:04 GMT
I agree that many fares have been hiked in recent weeks.
Looking at routes from the UK to Delhi, Major gateways in Asia and Australia, these jumped a year ago, and in recent weeks have increased dramatically, even via Net agents such as ebookers.
These days, i find few agents offer anything better than the Airline does direct, and in face they have sales of a few days which offer better possibilities in E, PE, and Business class eg with VS.
During school holidays which we are in at this time, prices get hiked even if you book ahead for other out of holiday dates. November tends to be a month when the systems and Airlines try to secure bookings ahead, as Jan into the coming year.
Some European carriers such as Cityjet from LCY have early booking offers from 19th Dec til end of Feb, with most returns to their cities for around £80! These include the peak hour and weekend flights, a good deal really.
I also looked at BKK, SIN, HKG, and MNL, in the last days. I agree that European carriers tend to be high and the EK, EY are cutting everyone, EK being the cheapest around on many routes.
But try looking at the KLM-UK site.
Most Middle East sectors run at £350-400 Economy, and Far East at £450+, a lot less than the £750 you mention.
Interestingly, KLM starting from Amsterdam is VERY expensive, and the Dutch pay twice the price than us starting from the UK. Fares are around E 750 for Middle East!
This cross-cultural marketing BA and Virgin use here in Amsterdam, as well as KLM in the UK, to gain business through their network.
In the last year, many of the 50 KLM flights all over Europe i have been on have been completely full, Lisbon, Budapest, LHR, Copenhagen, mostly with European passengers connecting to other continents.
KLM are heavily marketing on the net, and achieving much of this part of the market in Europe, and have a good reputation.
For me a sweep with a good search engine is useful, but then look at the deals on the Airline's website, as they often have a few days of sales others don't. These will also include Business seats.
I think we are in for expensive travel in the time to come, cuts have been made with the European carriers in all areas, yet they still hardly profit. The Gulf and Far East as well as China carriers have new, more fuel efficient profitable aircraft, and the numbers of travellers in their home base to make it work.
It shocked me to see the massive operation and expansion of Jetstar in HKG, and throughout Asia, with QF practically fading out in the last weeks.
Airlines are heading in a new direction, and the European Carriers simply cannot move with the same possibilities in my view.
LeTigre - 19/10/2011 14:41 GMT
http://www.thisislondon.co.uk/standard/article-23999651-biggest-inflation-rise-for-twenty-years
"Air fares were up by 17.6 per cent" since last year according to official inflation figures. And that's on top of last year's 20ish per cent increases.
This is one area where BA is definitely ahead of the curve, as their increases are always far more inflated/innovative!
RichHI1 - 19/10/2011 15:57 GMT
Don't know about the UK but US carriers tend to hike rates certain times in the year and fall or autumn is one of them. If you are flexible I would wait for sales as ORD is served by BA, VS, UA, AA and they all run sales going into the holidays
NTarrant - 19/10/2011 17:32 GMT
Fares have traditionally increased in April and October. As has been discussed in these forum's, you could purchase a ticket from an EU country via LHR or another European gateway.
I am heavily committed to Star Alliance but agree that Middle Eastern carriers could be the way forward. F-class seems to be about the same as C/J with European carriers to South Africa.
Am holding off booking as the travel is not until Sep 2012 so am holding out for those sales!
Agree on the lack of agent discounting or if there are discounts these tend to involve convoluted routings.
I fear there is a great risk European carriers could get left behind the same as happened in the US post-deregulation. Service even in Business class is in steep decline, as those that offer(ed) a premium product like BMI and OS just cannot generate profits.
Capetonian - 20/10/2011 12:34 GMT
It's not as simple as 'price hiking'. An airline won't simply put every fare up by x%, but their yield management systems use certain algorythms to maximise the revenue for every seat. Supply and demand are the principal drivers but by no means the only ones, so the fares on a particular routing will show differing increases depending on the type of fare you are asking for.
Thanks Capetonian. The algorithm seemed to always be supply and demand driven, which made sense for airlines to maximise per seat revenue at peak travel times. But things seem to have changed this last month.
LHR/ORD in discounted Business class GBP1950ish to GBP2650. This is not season and day of week dependent, it seems to be blanket across every day and month I have checked in the next 11 months.
LHR/ATH same story in discounted Business class. GBP620 up to GBP755. Increase applied since September 2011 for 2012 travel. Again did a check on different days of the week as my plans were reasonably flexible. Had reached the point of thinking the hike is not value for money so checked several months around the proposed travel date and same story as on the ORD route. Seems to be a blanket rise across all dates.
Perhaps the algorithm has simply changed from revenue per seat to profit?
RichHI1 - 20/10/2011 15:22 GMT
There are two factors at work here. the revemue management which fine tunes the actual fares charged and the allocation of seats in different seeling classes and the base fare structures, which in the US at least tend to go up by a margin percentage and all the carriers tend to follow each other with indecent haste, even though they may implement their revenue management differently based on their business models and the ir startegies for individual routes and their alliances.
Capetonian - 20/10/2011 15:33 GMT
Just to expand a little on what RichHI1 correctly says, the strategies in relation to competition will be reflected in apparently illogical fares, where (for example) KLM will fly a UK originating passenger LON AMS CHI AMS LON for less than they would fly a Netherlands originating passenger AMS CHI AMS.
Before anyone asks, I'm sure this has been done to death here before, but no you can't ...... (because if you don't use the first segment they will cancel the subsequent ones!)
GKing92 - 20/10/2011 16:08 GMT
peterrejcht have a look today at ba.com, I see LHR-ORD from £1749 for November to January - suppose the usual adage about when you want to f;ly applies. Some other tempting prices across the pond too - I think they are price matching like Waitrose but on Delta
Swissdiver - 21/10/2011 07:48 GMT
LondonCity
EK/QR/EY used to be cheaper but it is no more always the case. Travelling to BKK every year with the family. This year, KL had the best offer while the Middle Eastern were more expensive than the average...
In general, with the cold and grey weather comes the desire to travel. Add to this the fact that August and September financial markets froze many business decisions. Since the world has not ended, lots is happening now, a normally low season...
LondonCity - 21/10/2011 12:36 GMT
Swissdiver
I am sure there will be cases when some airlines are more expensive than others. And there will be a difference when flying ex-Switzerland rather than ex-UK because airline capacity varies from country to country. For example, the Gulf carriers offer many, many more seats from the UK than they do from Switzerland (I am assuming, of course, that you are originating from GVA or ZRH).
Certainly from the UK, the likes of EK/QR/EY will generally be the most price competitive for most of the time.
BA to BKK tends to be on the high side because its flights continue to SYD and so therefore BA allocates only a limited number of seats for BKK destined pax. But this will change in Spring 2012 when BA ceases flying LHR-BKK-SYD in favour of a LHR-BKK terminator which means BA will be able to offer better prices.
But I do wonder how Thailand's current floods will impact on visitor numbers in the weeks and months ahead ?
Swissdiver - 21/10/2011 12:52 GMT
LondonCity,
From GVA (a 400k inhabitants city, 800+ within a 50km radius), we have daily a A330 from EY and QR and a 777-300ER from EK. Not that bad... Plus they sell also via FRA, MUC and ... LHR. My feeling is that people are now confident to fly with them, something that wasn't may-be the case about 10 years ago.
Thailand is suffering a lot. They had to open the dams to the North of Bangkok and announced that part of the city will be flooded, including the business area... But they seems to have no other options. Worse flooding in 50 years :-/
Binman62 - 21/10/2011 14:47 GMT
Londncity....Afraid I must disagree with your analysis.
BA will not be going to SYD from BKK and Qantas are at the same time removing 2 x 747 operations at LHR each day including BKK LHR.
BA will operate a new HKG service in lieu of the QF operation but effectively there will be 450 fewer seats a day offered on n the UK OZ route by the JSA carriers (BA and QF)
You will see fares to OZ rise sharply in the next few months (though given the economic climate they may simply remain stable).
WT+ on BA was at one stage in the last month priced at £1895 return double the costs of WT. Business on a flat bed is now £3900 in the sale and First over £6000.
2 years ago I took a family of 4 on the QF A380 for £10K. This was booked first and included a stopover out and back. Since then fares have more than doubled.
Both BA and QF have reduced capacity to increase fares and the JSA agreement allows such manipulation of capacity. This is a win win for both as they will see increased yield on the OZ route whilst still being able to deploy the aircraft on other lucrative routes. Add to this the strong economic position of Australia and the huge demand for outbound travel and you have high demand matched to limited capacity. QED higher fares.
Redemption bookings will become harder as there is no co-operation between BA and QF on this matter on this route despite the JSA and shared revenue. For the customers it is very much lose lose.
LondonCity - 21/10/2011 15:16 GMT
Binman
I agree that fewer BA/QF seats could spell higher fares, although as you say much will depend on the supply and demand equation.
What I said above re LHR-BKK is that BA will, for the first time in many years, no longer route its Australian service via BKK.
In other words it will operate a standalone LHR-BKK service which ought to mean BA will price more keenly on this route than it has in the past.
LondonCity - 24/10/2011 16:32 GMT
When analysing air fares I always feel it's helpful to have an idea of when you are travelling because seasons change and airlines can revise their schedules up or down.
But who could have forseen that AF would see fit to cut back its CDG-BKK service next summer. For as long I can remember, BKK has been an important city on the AF network and for years AF has mounted a daily service.
http://www.businesstraveller.com/news/air-france-to-retreat-from-bangkok
I suppose that fewer seats ex-CDG mean higher AF fares although AF's move should not impact on prices ex-LHR.
Swissdiver - 24/10/2011 17:17 GMT
Wow, no more an option I guess... 17" width for 10+ hours, forget it! Unless they price really aggressively, I doubt it will work...
LeTigre - 24/10/2011 17:43 GMT
Wouldn't it be great for an airline to focus less on shareholder value and huge profits and actually charge reasonable fares for a good service on a spacious plane. Up until now I believe Qatar has been good at this, as well as Etihad, but in my view, all the others have lost the point. Perhaps someone will remind BA of its favourite slogan: To Fly, To Serve. Service includes fares. Even if call them fuel surcharges!
