AirOptions Blog

Wishing you every happiness this Holiday Season and prosperity in the New Year. Thank you for allowing us the opportunity to earn your business. In 2009, we will remain committed to procuring for our clients the best value for all their luxury travel needs. We look forward to continuing our relationship with you or creating a new one in the coming year.

This just in from The Associated Press: “Lufthansa said Wednesday its supervisory board had approved a deal to acquire Austrian Airlines, giving one of Europe’s biggest airlines more routes across the continent and beyond. The Cologne-based Lufthansa said its board had agreed to acquire the 41.6% stake held by Austria’s privatization agency, or OeIAG, for euro366,000 ($463,000) and, pending the Austrian airline’s performance, pay another 162 million euros.”

“The deal is subject to regulatory approval along with OeIAG’s supervisory board, which meets on Friday. Also key to the deal is approval by the European Union that 500 million euros in restructuring aid floated by Austria’s government be approved, one of the conditions that Lufthansa set in October to ensure that Austrian’s debt would be assumed by the state.”

Recently, someone wrote that he had bought a round-trip ticket from Atlanta to Kuwait from Northwest Airlines, operated by KLM, for the bargain basement price of $1,175 round trip (this fare usually starts at $1,500). Knowing that a low fare like this would be heavily restricted, he assumed he’d pay a penalty plus the difference in the fare if he needed to change his flight dates.

But he didn’t expect to be told, “Use it or lose it” by the airline when he tried to make a change, over a week in advance, to fly a day later than his ticket was scheduled. As in: No changes, not even for a penalty, and if you purposely “miss” your flight? No stored value for you. (Incidentally, there were seats available at the same price on the later flight.)

When NWA’s call center was contacted to ask about the flight and were told, “Well, it was a ‘T’ fare, so of course he couldn’t store the value.” Actually, this isn’t quite accurate. We checked with NWA spokesperson Michelle Aguayo-Shannon, who confirmed that, while T class fares are usually quite restricted, they’re not always “use it or lose it.”

The lesson here: While it would have been smart to thoroughly check the restrictions first, one class of airfare doesn’t always hold the same restrictions within even a single airline. And one airline’s “T” fare class could be another airline’s “K.”

Sound confusing? It can be. And it’s certainly possible to simply cruise through airfare booking, never learning a thing about fare codes.

But there are a couple of reasons to familiarize yourself with the basics: Anecdotal evidence is that, with airlines cutting capacity and in a constant state of financial flux, you’ll be seeing more fares, like Ken’s Northwest Airlines fare, that come with far heavier restrictions. Naturally, the most restricted airfares almost always come with the most attractive prices. But if you’re always succumbing to price alone, you can miss out on some benefits that come with certain fare classes, such as bonus mile offers, elite status miles, special promotions, or quirky upgrades (which we’ll get to later).

Why not just sell first and coach class tickets, and call it a day?

Before we get into the intricacies of class of service codes, here’s a little background. Of course you know of the major classes of airline service: first, business, and economy. Those classes are subdivided into a variety of sub-classes: restricted business, full-fare economy, discounted economy, deeply discounted economy, etc., based on restrictions. A full-fare economy ticket will have fewer restrictions, such as advance purchase, minimum stay, or penalty-free refund than a discount economy ticket, but you’ll pay for the privilege.

That’s the reason you could find yourself sitting next to someone in coach who paid $200 less for his seat than you did, while waiting the same number of infuriating hours on the tarmac and buying the same overpriced snack boxes as you. But we digress. It’s all part of inventory control. In order to stay profitable, years ago airlines began subdividing their seats, allocating a certain number of seats (or a “bucket”) at each fare level per flight. The number of these seats depends on complicated formulas that factor in the route, the time of year, the expected breakdown of leisure vs. business passengers, and the time of day, among other things.

The inventory control department will release certain “buckets” at different times, tightening or loosening the spigot as needed to capture as many potential passengers paying as much as possible. And no, the airlines don’t make public how many buckets they’ve created in any subcategory.

What fare codes look like

The letter that denotes class of service is only one in a string of letters and numbers the airline puts together to describe the fare you’ve bought. You’ll find the fare basis code in the fare basis box on a physical ticket, or on most e-ticket confirmations. Here’s an example: Say you bought a ticket with the fare basis code KL14LNR. The letter K refers to the class of service for booking; the L refers to low season; the 14 refers to a 14-day advance booking; and the NR means non-refundable. More than one fare may exist for each class of service. For example, there might be two “K” fares - one for midweek travel and one for weekend travel.

When it comes to holiday travel plans, good things may come to those who waited.The major U.S. airlines have cut many fares for the Thanksgiving and Christmas seasons.

The airlines, in the midst of their worst year since at least 2005, may see the price-cutting as necessary in the face of a slumping economy that could cut into both leisure and business travel. Airfare experts say they typically don’t see this kind of price-cutting until the last couple of weeks before big holidays.

Northwest Airlines started the rush Tuesday night with a broad holiday fare sale, and most other major carriers matched the prices Wednesday.

“It’s by far the most broad-based fare sale we’ve tracked in at least 18 months,” Seaney said Thursday, “and this is the earliest I’ve ever seen one.”

Tom Parsons, said in many cases travelers can still find better deals by shopping around and considering alternate airports.

“I’ve been looking for this sale for two or three weeks,” Parsons said. “When I finally saw it, it was kind of a letdown.”

Parsons said the cuts ranged up to 25 percent off the previous price for tickets that must be bought 21 or 30 days ahead of travel. He said travelers using secondary airports that typically have higher prices will get the biggest breaks.

But there are cheaper fares available on routes where the big airlines compete with low-cost carriers such as Southwest, JetBlue and AirTran, he said.

Some of the sale fares have blackout dates on Nov. 30 and Dec. 1 — the Sunday and Monday after Thanksgiving — and Dec. 20. And there are only a handful of “super off-peak” days, as Northwest calls them.

Some of the cuts are dramatic. Delta shaved the cheapest price for an Atlanta-Nashville round trip around Thanksgiving from nearly $500 to $238, Seaney said. The cheapest Minneapolis-Seattle flight is $248.

In most cases, the prices are good until at least late November.

Airlines aggressively raised fares and fuel surcharges last year and early this year but stopped when the economy slowed noticeably. The last broad fare hike was in early July, Seaney said.

Carriers would rather not be cutting prices now, but demand may be slowing faster than airlines can reduce the supply of available seats.

Southwest CEO Gary Kelly said this month that because of the economic slowdown, “the world has changed” and there is no guarantee about future booking trends.

“We know that fares are higher compared to a year ago,” Kelly told analysts. “We know the economy is in a complete recession … we’ve got to be prepared for a weak economy and weaker demand, which I think is destined to happen.”

The Society for Accessible Travel & Hospitality’ (SATH) will hold its 13th World Congress at the Contemporary Resort at the Walt Disney World Resort, January 4–8, 2009. The theme, “Breaking Barriers, Building Bridges” reflects SATH’s continued efforts to break down barriers to travel for people with disabilities. SATH hopes to build bridges among suppliers, service providers, travel agents, tour operators and consumers.

“For over 32 years, SATH has been at the forefront of these efforts, and this Congress, our 13th, once again provides the platform to make this all happen,” SATH said in a statement. “We invite all travel professionals, whatever role you play, be it the traveler or travel agent, tour operator, meeting planner, cruise line, airline, hotel, destination or attraction. Our mission is to help everyone better understand the needs of this important market, which is growing dramatically, by providing a forum for idea exchange, networking and a trade show.”

Station KHNL in Waikiki is reporting that the Hawaii Visitors and Convention Bureau (HVCB) is putting forth an aggressive new strategy to bring visitors back to the islands. While 2006 and 2007 were two of the best years ever for Hawaii tourism, 2008 has been the worst. Tourism officials are expecting a slower holiday season than last year, but with aggressive marketing and great deals, they hope to turn things around in 2009.

The HVCB will target those who have the resources to travel next year by marketing Hawaii’s value and diverse tourism offerings. They’re especially targeting North America, which accounts for 75 to 80 percent of all visitor spending. Deals being promoted on the Hawaii Convention & Visitors Bureau website run the gamut from free nights to discounted air.

United has announced new daily, nonstop service between Washington, D.C. and Geneva and plans to reinstate daily service between Denver and London from March 29 through October 23.

“We will continue to adjust our capacity to market conditions and seek new opportunities to serve markets that respond to our customers’ needs and deliver the results necessary to return us to profitability,” said Kevin Knight, senior vice president of planning.

Pending government approval, scheduled flights between Washington Dulles and Geneva  would depart D.C. at 6 p.m. and arrive in Geneva at 8 a.m. the next day. Return flights would depart Geneva at 12 p.m. and arrive in D.C. at 2:56 p.m. Tickets are now available and United is offering an introductory sale on flights to Geneva with fares priced at $449 for travel Monday through Thursday and $469 for travel Friday through Sunday.

The proposed schedule of flights between Denver and London Heathrow depart Denver at 7:59 p.m. and arrive in London  at 12:15 p.m. the next day. Return flights depart London at 1:05 p.m. and arrive in Denver at 4:01 p.m. Tickets for this United flight will be available November 20.

The Federal Aviation Administration has confirmed that it issued a safety mandate to make sure fuel pumps on hundreds of Boeing 737 airliners shut off correctly. The agency said faulty fuel pumps could result in explosions or fires. An FAA representative said the aircraft will not likely be grounded for the checks, so service should not be affected.

The Department of Homeland Security is rolling out new technology that will enhance security at border crossings while speeding up the process. “The border folks came under extreme criticism about how the potential for further delays will have a negative impact on people who want to cross the border during these high-profile events,” said Mike Milne, a representative of the U.S. Customs & Border Protection. “One of the things that we are doing … is installing this new technology that allows us to process expeditiously those with secure documentation.”

Airlines are now realizing that their decision to end commissions for travel agents has actually raised rather than lower their expenses. The economic downturn has forced all sorts of travel-related companies to re-evaluate their revenue streams and costs and what they’ve found is that agents are more valuable than previously thought.