How charter holiday pricing works — Part 2

How charter holiday pricing works — Part 2

Last week, we explained in more or less simple terms how charter pricing works. This week, we focus on scheduled airline fares and the fundamental manner in which they differ from charters. Scheduled airline fares apply only to scheduled air services. These are operated by airlines. A scheduled service must operate on the date, time and frequency specified — whether  the flight is full or empty. As a general rule of thumb, the further out from the date of departure a flight is booked, the cheaper it will be. The fare gets more expensive, the closer it gets to the date of departure — exactly the opposite of how charters work. Charters are speculative flights that involve tour operators hiring (or chartering) aircraft from an airline in order to meet an expected demand on a particular route.

The general lack of availability of keenly priced holidays or flights in the Irish market right now shows how easily consumers can get it wrong.

Because money is tight these days, many consumers purposely held back, hoping that by waiting until the last moment, they would be able to avail of distressed holiday inventory and get package deals or flight onlys at knockdown prices. What they hadn’t figured on was adjusted capacity! Tour operators routinely shrink the size of their programmes in order to try and match expected demand. If demand exceeds supply, then the prices stay up as more punters chase fewer packages. The problem for the consumer is that by the time they find this out, scheduled air fares have risen in the meantime — effectively meaning that they’ve been priced out of the market. The result is that either the intending holidaymaker postpones their trip until later on in the year (e.g. in September or October) or else they forgo this year’s holiday and instead book early next year in order to avoid a repeat of this year’s disappointment!

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