Where are the cheap flights and holidays gone?

Not long ago, it was always possible to wait for the last day or two days before departure to get a holiday or flight transaction. The game has changed now. The following is an overview of the factors that led to the change.

The main driver of holiday costs in the 1980s/early 1990s was the cost of airline seats. Tour operators can choose to use scheduled carriers with special IT rates or group rates: but they can also choose charter flights. In both cases, they must commit to a seasonal plan and build their price around the seasonal rate of return. Especially in the case of a charter flight series, traveling as a sky seat is a loss.

A well-managed plan allows a certain number of empty seats (especially in the off-season) to be an acceptable loss – and can be mitigated by seat sales at any price allowed by the market. Therefore, for those who are flexible about their destination and date, cheap flights and holidays that form part of the package are available a few days before departure.

As larger operators control all elements of the vacation package, “internal” airlines have incorporated this cost-balanced management right into different levels. Their pricing policy – or "revenue management" equation – can be dealt with in the context of the holiday company's overall profit margin. But it is the way these internal airlines operate to determine the main differences in these policies.

The rise of so-called "frimless" airlines has overturned the old pricing model. They are no longer discounted the day before they fly. Many people, such as Ryanair and easyJet, are now using the pricing model first proposed by American Airlines Southwest Airlines. Holiday company "internal" airlines have followed suit.

Southwest Airlines realizes that many people will postpone purchases once you have uncertainty about whether prices will fall later. Operators with “no extra decoration” are offering ridiculous low prices, leading loss-making fares, with the advantage of selling all their own sales through telephone sales and online. Therefore, they can change the price every minute according to the "revenue management" algorithm. They use this control to manage the expectations of buying the public. They choose to make sure prices continue to rise until they take off – so if you refuse early purchases, you will never see the price low again.

This policy – now undertaken by the internal holiday airlines, encourages early commitment to specific flights (and holidays). Cheap, last-minute bargains are largely replaced by "early bird" offers and "points" cards to generate sales in slow or off-season capacity – without overly reducing airlines and vacation companies The price of the passenger can be controlled at the last minute.