TrailFinders Personal Journeys

Last week you paid $358 to fly from Ottawa to Toronto and back. This week it could cost you as much as $850 or as little as $139: three drastically different fares for what appears to be exactly the same product. Why?
Your travel agent quotes you $646 for a return flight on Air Canada while an identical flight on a different airline is quoted at $275. This, in spite of the fact that the two airlines may have established exactly the same fares for the same route - to the penny. So why the difference in the quotes?
Why is there no simple answer to a question such as “How much is a round-trip plane ticket between Ottawa and Toronto?”

The mystery of airfares revealed! Read on…

Introduction

We at TrailFinders have been providing travel services to corporations, government, non-governmental organizations, small business, groups and individuals for over twenty-five years and we understand airfares very well. Every day we spend much time explaining to our clients the mysteries of restricted tickets, change fees, refundability, advance purchase and so on. However, the subject is complex and despite our best efforts, many of our clients remain confused by the airlines’ fare rules and they often seek a deeper understanding than we can give them in short conversations on the telephone.

Because of the frustrations voiced by our clients we created this article. We sincerely hope you will take the time to read it, absorb it and pass it on to others. While it may seem complex, we have actually over-simplified the explanations and experts will notice our exclusions.

Airfares, Airlines and Choices

Most domestic travellers would suggest that in order to get the best fare they simply need to call each airline in turn, or look up fares on their websites and pick the cheapest. They fail to recognize that:

· Air Canada, Air Canada Jazz, Westjet and Canjet provide relatively equivalent service so generally Canadians have a choice. There are also scores of smaller carriers as well as other regional airlines who provide domestic service. Soon, American carriers may also be competing in the Canadian domestic market, that is, they will provide services between Canadian cities through their US-located hubs. Soon calling or visiting every airline will be a time-consuming exercise.

· Air Canada and other airlines often set up their fares to ensure that they match each other to the penny, so in general many airfare quotes could be identical. They could also be totally different and that difference has nothing to do with the fares, it has more to do with who's booking what when;

. When the fares are not the same, the difference generally arises from the fact that the fare is based on the price of the vacant seats remaining on a specific flight (described in detail later in this article) and therefore varies according to the number of people who have booked before you - the cheapest seats are sold first;

· Each airline can only see the availability of seats on its own aircraft and therefore cannot tell you (and of course wouldn’t tell you) if the competitor has cheaper seats on the day you wish to travel.

An international traveller would find much the same situation, however the complexity increases substantially.

· Besides Air Canada there are scores of other airlines to choose from;

· While domestic tickets are not generally discounted, US and international ones can be, and the traveller will often be able to obtain discounted tickets through retail travel companies who deal with special wholesalers;

· These wholesalers, often known as consolidators, do not deal directly with the public. They have agreements with the airlines (including Air Canada) to re-sell their tickets through retail agencies at a discount – generally cheaper than the airlines would sell these tickets themselves;

· Because the wholesalers can often be allocated seats for resale, an airline often may not be able to see the total seat availability on its own aircraft and the public can be led to believe that all reasonably-priced seats may be gone. This may not be the case.

The conclusion is simple: You cannot get the “best fare” by dealing directly with an airline, even if you take the time to call them all and visit all their websites. The only way to get the best airfare is to call a reputable travel agent who can see all products, can deal with all suppliers (including charter companies and wholesalers) and who is working for you.

Standard Published Fares, Classes and Fare Types

We are all familiar with the major classes in air travel: First class; Business class; Premium Economy class; and, Economy class.

Within these broad categories however, there are many different fare types and correspondingly, many different fares. For example, within each category there may be regular or full-fares, discount excursion fares, weekend fares and seat-sale fares. There may also be “premium” fares or even special fares for seniors and groups.

‘Getting the best fare’ requires an understanding of the rules associated with these fares, however, in general, the more ‘airline restrictions’ a passenger can live with, the cheaper will be his flight. Specific rules govern items such as the minimum and maximum length of stay, whether the passenger is staying one night or several, whether the ticket is purchased seven or more days in advance and so on.

For example, full-fare tickets have few restrictions. They have no advance booking requirements, no minimum or maximum stay, no cancellation penalties and no additional costs for making changes to the ticket. The tickets are generally fully refundable and endorsable (can be used on other airlines). Prices are quoted on a one-way basis and are added together to get the total fare. These fares can apply to all classes. Obviously, these tickets are the most expensive and are used where the traveller requires the flexibility of a full-fare ticket. Small discounts from full-fare are often available for seniors or children. As with full-fare tickets, the fare is quoted on a one-way basis and the tickets are fully refundable. These fares also apply to all classes.

Excursion fares, which apply only to round-trip economy class travel, are those chosen by most travellers. They are the least expensive and are used by those who are not inconvenienced by the many restrictions imposed by the airlines. All excursion tickets require some form of advance booking, generally 21, 14 or 7 days prior to departure. A minimum and maximum stay is required and the number of seats in this category on each aircraft is limited. The excursion fare is determined at the time of booking by considering the departure and return dates at the same time. Therefore, if the traveller makes changes to these tickets after they have been purchased, a whole new fare calculation is required and the resulting fare can often be significantly higher than it was at time of booking. As well, these tickets are often totally non-refundable. Penalties, over and above any fare increase, are applied for any changes to the itinerary. It is the airline that imposes these fees, not the travel agent.

To remain competitive, an airline must react quickly to changes in the overall fares charged by its competition. Therefore, excursion fares can change at any time and travel agents and the travelling public are not usually advised ahead of time. In the case of fare reductions, such as seat sales and special promotions, if an excursion ticket had been purchased prior to the seat sale at a specific fare, the airlines will not allow the traveller to trade in the ticket for one at the new, lower fare.

Airline excursion fares can also rise at any time. It is important to note that a fare quote is only guaranteed upon full payment of the ticket. In certain circumstances, a fare quote could have been obtained on a certain day and be invalid a day later if the ticket was not purchased prior to the fare change.

Ticketing Deadlines

One way in which airlines can partially make up for the loss of revenue due to the relatively inexpensive excursion fares is to insist that the traveller pay for the tickets at the time of booking or relatively soon afterward. Many travellers are annoyed to be told that they must pay quickly or lose the booking, and it is the travel agent who is usually blamed for creating these rules. In reality, these rules are imposed by the airlines.

There are several types of ticketing deadlines on excursion fares. Some require that a ticket be purchased within 24 hours of booking. In this case, if a traveller makes a booking on October 10 for travel the following March, the ticket must be paid for by October 11. If not, the reservation is automatically cancelled, the previous airfare quote is invalid and a new one must be obtained. The traveller may then have to pay more for the same ticket.

Also, as mentioned previously, excursion fares are generally subject to advance purchase, such as a minimum of 14 days prior to commencement of travel. Consequently, a traveller making a booking just two weeks before travel may have to pay for the ticket immediately.

While it is difficult to forecast the exact airfare that a traveller will pay for a specific type of excursion fare on a specific route on a specific date, in general, the cheapest fares are obtained by booking early rather than by waiting. Many travellers continue to believe in the “last minute airfare bargain” - the premise being that the longer they wait to book and pay for their ticket, the greater the likelihood that they will get the cheapest fare. Nothing could be farther from the truth.

The Concept of Fare Classes

In order to understand how airfares work it is essential to examine the concept of “fare class” or class of service.

If we were to interview individual travellers sitting in the economy class section of an aircraft on any specific flight and we were to ask each of them how much they paid for their ticket, we would find a wide variance. For example, on a flight between Ottawa and Vancouver some may have paid $349 and some as much as $3000 for what is essentially the same thing - a seat in the economy section of the aircraft.

If you take a look at their air tickets you would find that the fare they paid is dependent on the “fare class” they are booked in as shown on their tickets. The broad category of fare class is indicated on the ticket by a single letter printed beside the flight number in a column headed ‘CL’. In economy class the letter will generally be one of Y,B,H,K,M,N,Q,L,T or V. In Business class you may see fare classes such as J,C or D, and in first class you might see P,F or A. Within these broad fare classes there can often be many sub-categories; for example in ‘M’ you may see the actual fare basis shown on the ticket as ‘MHABO’. Every individual fare basis has its own rules and its own fare. There are literally hundreds of these.

In general, economy fares become cheaper as you move from fare class ‘Y’ (full-fare economy) toward fare classes such as ‘L’, ‘T’ or ‘V’. At the same time, rules become more restrictive as you move down the list from ‘Y’. Therefore, the concept is, if you need more flexibility, less restrictions and less rules, you move up in fare class and pay more. The person paying the high cost ‘Y’ class fare sits in the same section of the aircraft as everyone else, gets the same service as everyone else, eats the same food as everyone else, but was allowed to book his flight the same day he travelled, is allowed to change his reservation at any time without charge, is able to use his ticket on a competitive airline if he wishes and is allowed to cancel part or all of his trip and obtain a refund. His travelling companions with tickets in cheaper fare classes will not be so fortunate.

So fare classes have little to do with where you sit on board or the service you receive. They have everything to do with flexibility. The fare you pay is determined in large part by how much flexibility you need.

The Fare Table

Let’s look at a simple example of airfares available for a hypothetical trip from Ottawa to Vancouver. Here is the type of information a travel agent would see on the computer screen while discussing the options for this trip with a client. Fares are shown in order from lowest to highest. ‘R’ indicates round-trip. AP is ‘Advance Purchase’ requirement. L and H indicates high and low season fares, i.e. where the date of travel is near a high/low season change date, both are shown. A good agent will suggest dates which allow travellers to get the low season rate by flying a day or two earlier or later. ‘Sa’ is a Saturday night stay. Note that these fares are fictitious but are representative.

Airline	Fare	Fare Class	AP (days)	Min Stay	Max Stay	Other Rules
AC	$349 R	L	3	2	3	Depart Saturday, return Monday or Tuesday. Non-refundable, change fee $150
AC	$349 R	LX	7	Sa	30	Weekday only, seat-sale fare. Non-ref, chg $150
AC	$379 R	LW	7	Sa	30	Weekend, seat sale fare. Non-ref, chg $150
AC	$379 R	LL	7	Sa	90	Night fare (dep after 6pm) Non-ref, chg $150
AC	$419 R	QX	7	Sa	30	Weekday seat sale fare. Non-ref, chg $150
AC	$439 R	QL	7	Sa	90	Night fare. Non-ref, chg $150
AC	$449 R	QW	7	Sa	30	Weekend, seat sale fare. Non-ref, chg $150
AC	$449 R	L	7	Sa	90	Night fare, special dates only. Non-ref, chg $150
AC	$503 R	QL	14	Sa	30	Child fare. Non-ref, chg $150
AC	$519 R	LH	7	Sa	90	Night fare. Non-ref, chg $150
AC	$548 R	QH	14	Sa	30	Child fare. Non-ref, chg $150
AC	$559 R	QL	14	Sa	60	Non-ref, chg $150
AC	$579 R	QH	7	Sa	90	Non-ref, chg $150
AC	$609 R	QH	14	Sa	60	Non-ref, chg $150
AC	$646 R	VL	14	Sa	60	Non-ref, chg $150
AC	$716 R	VH	14	Sa	60	Non-ref, chg $150
AC	$740 R	HL	7	Sa	90	Non-ref, chg $150
AC	$808 R	HH	7	Sa	90	Non-ref, chg $150
AC	$1025 R	BL	7	Sa		Non-ref, chg $150
AC	$1131 R	BH	7	Sa		Non-ref, chg $150
AC	$1177 R	Q	7	Sa		Companion fare. Non-ref, chg $150
AC	$750	B				USA child fare
AC	$1059	B				USA fare
AC	$2185 R	B	3	Sa		CXL OK $150, chg OK $150
AC	$1324	YCH				Child reduced fare
AC	$1471	Y
AC	$1721	J

Airlines can change their fares at any time (and frequently do!) therefore the fares quoted by your agent on a specific day ( for example, those shown in the table) may be different than they were the day before. Bookings made on any specific day must use the fare tables showing on that day. The fares are established by the airlines and the agent has no choice.

We have kept this example simple by showing only one airline, however in reality, the agent would also see the similar fares for every other airline flying this route. Also, the fare classes would be more complex than just QH or QL. There may be hundreds of different actual fare classes and fares, scores of airlines and hundreds of routings.

Determining the Fare

In the example shown above, if a client were booking an Ottawa-Vancouver trip based on this fare table he could pay anywhere from $349 to $3442 for his return ticket.

How does your agent determine the lowest fare a client can pay?

It depends on the client’s flexibility. For example, the following questions must be asked.

· How long will you be staying?

· Are we now at 7 or 14 days prior to the travel date to get the advance purchase?

· Can you travel after 5 pm to get the night fare discount?

· Do you need flexibility in your dates? i.e. are you likely to change your dates or routing?

· Do you need a ticket which is refundable?

The answers to these types of questions will enable the agent to quote the best fare for the client.

As you can see, there is no single answer to the question “How much is a ticket from Ottawa to Vancouver?”

Availability

At this point in our example, the agent has chosen the best fare for the client. The next step is to determine if that fare is actually available on the dates he wishes to travel. The fare is only available if there are seats on the specific aircraft on the specific day in the fare classes chosen. There are a limited number of seats in each fare class on each aircraft. The exact number is determined by the airlines. Usually once they’re gone, they’re gone.

The agent will look at the seat availability on all flights departing on the date the client has requested at or near the times the client has requested. Here is a simplified example of what the agent might see on the computer screen.

AC903 J5 Y7 B2 H1 V1 Q0 L0 YOWYVR 0930 1140
AC907 J6 Y4 B3 H3 V4 Q1 L0 YOWYVR 1755 2019

These are the direct flights showing for the date the client wishes to fly. The screen will also show all connecting flights but, for simplicity, we have not shown them here.

The table shows the flight number, the number of seats available in each of the fare classes, the departure and arrival points and the departure and arrival times. For example there are 5 business class seats (J) available for sale on flight 903 and 11 economy seats. (7 in full fare economy (Y) and 2 in B, 2 in H and 1 in V.) These fare classes correspond to the prices shown in the fare table above.

If the client stated that he wanted only direct flights, the best fare available on this day would be in fare class Q on flight 907. If he were to choose flight 903, the best fare would be in V fare class. Consequently it would cost the client more if he were to fly on the early morning direct flight than it would on the evening flight even though the actual seat in the economy cabin of the aircraft might be identical in either case.

The longer a client waits to book the flight, the less seats will likely be available in the lower fare classes and the higher will be his fare. For example, if the client had called the agent the day before and asked about the fares, the computer may have shown the following.

AC903 J6 Y7 B3 H2 V2 Q2 L0 YOWYVR 0930 1140
AC907 J7 Y7 B4 H4 V4 Q3 L1 YOWYVR 1755 2019

The client could then have booked flight 907 in L class and paid the absolute lowest fare possible, but waiting an extra day resulted in all L class seats being sold out. The decision to wait one day to call the agent could have cost the client $297 (V less L fare).

The same procedure is followed by the agent for the return flight back to Ottawa. If the seats in both directions are in the same fare class, the fare in the Fare Table will apply (plus taxes). If the seats are in different fare classes, the fares shown in the fare table are divided by 2 for each class and then added together to get the total fare.

You can appreciate that the fares paid by a client for several trips between Ottawa and Vancouver on different dates at different times of the year could vary widely and yet each fare could have been the cheapest fare available at the time of booking - even if the airlines didn’t change the fares at any time during the year.

When the airlines advertise fares, they show only the cheapest fare in the ads, i.e. the lowest fare class. (As well, they tend to leave out taxes, airport improvement fees, security fees, etc. when they advertise their fares). If a seat sale is announced and if the client does not act quickly, the limited number of seats on each aircraft in this fare class may be sold out when he tries to make the booking. This is frustrating for the client and he may tend to take this out on his travel agent, when in reality, higher fares result from his procrastination.

Changing your flights after ticketing

The vast majority of airline tickets sold are "restricted" in one or more ways. For example, most are totally non-refundable. Many carry change fees. Many do not allow changing of the routing and many are non-endorsable (only good on the airline indicated on the ticket). Generally, the only totally unrestricted tickets are Full-Fare Economy and Business Class tickets.

When a client purchases a restricted discount ticket, he has made a contract with the airline according to the conditions and rules associated with the fare paid. That is, the airline agrees to sell him his seats at the reduced price in exchange for him agreeing to use the ticket according to the rules. If he changes his ticket, the airline can and usually will assess penalties. (It is indeed the airline which assesses these penalties, not the travel agent.)

Here are a few examples of what happens when a client flying on a restricted ticket changes a reservation.