LoneStarMike
Topic Author
Posts: 2802
Joined: Sat Jul 01, 2000 1:02 pm

Overnight Stays For Discount Fares - Why?

Fri Jul 20, 2001 9:24 am

Most of the major airlines will give you a discount if you book far enough in advance and your itinerary includes a Saturday night stay. Some others, like Southwest, simply require an overnight stay (not necessarily a Saturday).

Why is this? I can see giving someone a discount if they plan ahead because they airline gets their money sooner, but as long as I am flying a particular airline to and from my destination, what difference should it make to the airline whether or not I stay overnight? Is this just a rule so they can gouge business flyers who want to make short same-day trips? Was the "overnight stay" requirement in effect prior to deregulation? Are there any airlines that don't have an overnight stay requirement in order to qualify for discount fares? (I'm thinking that jetBlue doesn't).

LoneStarMike

 
jessman
Posts: 1457
Joined: Sun Jul 08, 2001 1:11 pm

RE: Overnight Stays For Discount Fares - Why?

Fri Jul 20, 2001 9:39 am

The business man is how the airlines make the big $$$
Short answer is the saturday night stay is to gouge the business traveler. But, even at the majors one night stays are becoming more popular and Delta, for example, is publishing a lot of deeply discounted One Way fares which have NO minimum/maximum stay/ example atl phl 7day advance 82.25 with all taxes/etc included.
 
Tango-Bravo
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RE: Overnight Stays For Discount Fares - Why?

Fri Jul 20, 2001 5:28 pm

If my memory is correct, the Saturday night stay required for some discounted fares began in the years immediately before deregulation became effective in the U.S. If not, it became the norm on the lowest fares offered from the earliest days of deregulation.

Speaking of the unconscionable disparity that has developed between fares typically paid by business travellers and leisure pax on all of today's major airlines (except WN), the difference was far less back when "super-saver" discount fares were introduced in the mid-'70s. Until well into the '80s, typical savings over unrestricted coach fares were 20-40%, depending on amount of advance purchase and other restrictions.

Compare that with today's fleecing of business travellers who often pay 4-10 times the fares paid by others on the same flight, in the same coach cabin, all of whom are experiencing the same service which is mediocre at best. Herb Kelleher said it well when he once referred to the pricing practices of the U.S. major airlines that are obviously tailored to gouge business travellers and others who are unable to book ahead as "outrageous, opportunistic."

Southwest practices what Herb preaches; in most instances the difference between their unrestricted and lowest discount fares in the same market is less than double. Only when WN is offering "$99 each way based on round-trip purchase, airport and flight taxes additional" on their longer routes have I seen their unrestricted fare price at (slightly) more than twice the amount of the lowest fare in the same market.

IMO, the U.S. major airlines (with the exception of WN) have painted themselves into a predicament with their pricing habits over the past decade. While smugly supposing they could go on and on fleecing enough business travellers to offset the give away fares offered, as needed to ensure that their planes flew packed to the point where airline service became something of an oxymoron, two things happened, the brunt of which is reflected in recently released second-quarter results.

Even while load factors remain high, most U.S. majors are awash in red ink for two reasons:

1) The line was crossed in the price the business travel market is willing to bear. The economic downturn made the businesses paying the travel bills rethink their runaway cost of air travel. While a considerable amount of business travel continues to take place, travel managers have "discovered" that, in many instances, trips can be planned far enough in advance to take advantage of discounted fares. Far fewer are willing to pay the confiscatory fares that airlines supposed they could depend on exacting from business travellers.

2) As fares paid by business travellers soared out of sight, the same airlines took on an increasing propensity to price non-business travel in a manner to ensure their planes were packed at any price -- as in conducting fire sales wherever and whenever needed to satisfy their obsession with oversold, overcrowded flights. As a result, not only has airline service declined sharply; leisure travellers have become more astute in beating the airlines at their own fare games: hold out on the airlines until they panic over the number of unsold seats in their inventories and initiate the next round of fire sales.

Airline yields are taking a significant hit on two fronts, it appears. IMO the losses that most of the U.S. majors have experienced in the first two quarters of 2001, even while load factors remain high, is a case of "what goes around comes around." The U.S. majors who are losing their millions painted themselves into their current dilemma with their wanton disregard for equity in pricing -- IMO, as more and more travellers have learned how to beat the airlines at their own games, the U.S. majors are reaping what they have been sowing for most of the past decade.



 
jplenny
Posts: 162
Joined: Mon Nov 22, 1999 9:02 pm

RE: Overnight Stays For Discount Fares - Why?

Fri Jul 20, 2001 7:43 pm

OK,

Dumb question....Based on this statement below, Delta used to have one way fares with a minimum/maximum stay?

One way is one way....there should be no minimum/maximum stay?

----
But, even at the majors one night stays are becoming more popular and Delta, for example, is publishing a lot of deeply discounted One Way fares which have NO minimum/maximum stay
 
LoneStarMike
Topic Author
Posts: 2802
Joined: Sat Jul 01, 2000 1:02 pm

RE: Overnight Stays For Discount Fares - Why?

Fri Jul 20, 2001 8:40 pm

Jplenny, he was just stating the obvious, as in "Delta, for example, is publishing a lot of deeply discounted One Way fares which (Obviously) have NO minimum/maximum stay."

Back on topic, I think the only things that should matter as far as qualfications for discounted fares would be 1) how far in advance you make the reservation, 2) what day of the week you travel (Tues, Wed and Sat. should perhaps be cheaper than the other days as less people fly on those days) and 3) time of day (midday and late night might be cheaper than early morning, late afternoon/early evening.) JMHO.

LoneStarMike

 
richardw
Posts: 3131
Joined: Tue May 08, 2001 3:17 am

RE: Overnight Stays For Discount Fares - Why?

Sat Jul 21, 2001 2:27 am

easyJet in Europe doesn't have any daft stay conditions and is a profitable airline.
 
SEA nw DC10
Posts: 471
Joined: Fri Oct 22, 1999 3:03 am

RE: Overnight Stays For Discount Fares - Why?

Sat Jul 21, 2001 5:22 am

Recently, I flew from SJC-LAX on SW for 30 bucks each way, it was a promotional sale fare. One of the requirements was an overnight stay, which I did not plan on doing, it was a day trip. So, I booked my ticket there and back in the same day and only paid 60 bucks. My itinerary still said overnight stay requried but I didnt stay overnight and I still got the deal. I don't think they watch it that carefully, especially if you book online.

SEAnw DC10
 
B744F
Posts: 2927
Joined: Sat Jan 21, 2006 4:52 pm

RE: Overnight Stays For Discount Fares - Why?

Sat Jul 21, 2001 8:09 am

Tango-Bravo,

actually full-fare business class travellers are those who making airline able to be profitable. i'm in airline commercial (cargo, not pax, but nevertheless i know this business inside) so i know that typical scheduled service of normal (not a no-frills) airline will make losses being carry only economy-discounted passengers. business pax creating 70% profit of average airline even considering that those pax are only 15-25% of total pax traffic.
yes, a lot of companies now moving to limit their people to travel no-frills airlines or at least to fly economy class. recently i was travelling (intra-european) on overbooked flight, i was very late a check-in, so i was assigned with a seat at ecomony (b737), having a full-fare business class tickets. my neighbour was a manager of big well-known company who told me that their company introduced economy-class (when and where available) travelling even for top management. just to compare - my company paid USD 980 for my full-fare business return ticket, and his company paid just USD 195 for ecomony-discounted return ticket.
another point of view - anyway there still A LOT of pax who can not plan their trips well in advance, who can not afford over-weekend rules etc... just for examle - i'm flying twice per month in average but at the present moment i know only 2 trips i will make in future - this november to London and next year summer to Hong Kong. and that is typical for me - i know about most of my trips just 1-2 days in advance and sometimes even 3-5 hours in advance only - so my company do not have a choice other than full-fare business tickets
 
TG992
Posts: 2310
Joined: Tue Jan 09, 2001 12:03 pm

RE: Overnight Stays For Discount Fares - Why?

Sat Jul 21, 2001 8:22 am

Exactly..

The people who are paying full fare tickets are subsidising the low fares. Full service airlines with a comprehensive network around the world can't afford to offer those low fares unless they have the full fares passengers travelling as well.

If the fares business travellers pay were lowered, then the low-end restrictive fares would end up rising. Don't forget also that the low-end fares have a lot of restrictions - ie nonrefundable, changes require upgrade, etc, that the high-end fares don't have. In most countries a lot or all of the business fares are able to be claimed back on tax, anyway.

-
 
Tan Flyr
Posts: 1558
Joined: Sat Aug 19, 2000 11:07 pm

RE: Overnight Stays For Discount Fares - Why?

Sat Jul 21, 2001 8:42 am

When the CAB granted AA the right to offer "super Savers" in 1977? the saturday night stay was born. I seem to recall that the old CAB had a hand in creating the rules that governed the fare basis, and thus it stuck.

In 1992 AA tried to simplify the fares down to 4 or 5 fares. It lasted 2 or 3 weeks until NW broke ranks and started a fare war that summer.There was First( about 30% less than the regular first), coach, and a 7 day adv. purchase and either 14 or 21 day adv. purchase fare. We should go back to that. Maybe the recession will bring some sense to the market, because as a self employed person I cannot afford full coach.