Sunday, June 26, 2005

Airfare Warfare

Airfare Warfare
Originally uploaded by gopoo.

It is no more plain vanilla stuff. The subject of airfares has become so complicated that the math is maddening. An airline can have thousands of fares with different set of associated rules for each leg of a trip. If two persons take a round trip together with three flights going and coming, there can be as many as 1000 to the power 12 or 10 to the power 36 airfare combinations. isn't that mindboggling?

Computer scientists Jeremy Werthaeimer of MIT and Carl de Marcken have developed a software that is now being used by many airlines.It is an airline pricing search engine. But no airlines can guarantee the cheapest fare.

Now comes the question as to how are the ticket prices determined?. It is completely determined by the airlines. Prices are calculated based on number of passengers on an aircraft and cost of operating the aircraft. And airlines offer different fare levels on different flights. How does that explain the drastic fall in the Delhi-Mumbai return airfare after Spicejet and Kingfisher decided to join the fray? And this when the aviation fuel prices are rising.
The fundamental rule to follow to get a cheap ticket is to buy the ticket early.The price on the ticket has got nothing to do with the length of the air journey.It is a question of supply and demand. Airlines want to maximise total revenue and they avoid flying with any empty seats. These are the main goals. There are other subgoals as well. Customer loyalty(frequent flyer programmes),weaning customers from other airlines etc. And there are further complications like flying on a particular day of the week or at an unpopular time. Attractive fares for less congested aiports. And what is the result of trying to meet all these different goals? A complex airfare system resulting in different passengers having paid different fares on the same flight.It may even be cheaper to fly Mumbai-London-Delhi than Mumbai-Delhi direct.

But then there is peace in war also.Though there is intense competition generated by the low air fares,the airlines work in tandem as well. For example recently when my IA flight from Bangalore did not take off,the IA aiport officer immediately put me on a Jet Airways flight though I was holding an Apex ticket. It was sheer luck that I got the best seat.The new mantra is competition with cooperation.

The order books of Boeing and Airbus are overflowing. So much so that Airbus has decided to call off its protest against Air India's recent orders on Boeing.They even wanted the matter to be referred to our Cental Vigilance Commission. In the recent Airshow in Paris, the orders generating from India were so many-80 airbuses,100 boeings etc etc that millions of eyes popped out at the billions of dollars of orders on these two born enemies.

It is being said that 2005 will be the year of R.K.Lakshman's common man flying? Will it be so? Time alone will tell.


rums said...

the aspiration to fly is there. our housekeeper who is from jharkhand wanted to know the other day if she could fly the next time she goes home for a holiday!

gs said...

our entrepreneurs have delivered a dream indeed.what was considered impossible some time back appears to be within the realms of possibility.air travel can definitely become very affordable.

edison said...