Distressed Inventory – How Do Airlines Get Rid of Seats?

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ozfflyer

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have been looking at flights to EU & USA/Canada for next school holidays starting around mid November.

There seems to be reasonable loads end of November to around 20 December & again 1st week of January, but outside those periods, many flights seem to be only 1/3 to 1/2 sold, which is very low only 3-4 months out.

Hard to cancel flights, as might have decent loads in one direction only.

With school holidays in Qld( & Vic I think) starting tomorrow & NSW in a week & most airlines having crazy numbers of seats unsold for the long school holiday period, what do the yield managers do ?

Do they

1) offer agents more commission? (heard that something like 65% of international tickets ex Australia sold by agents - not sure how much of that is online)
This would be self defeating if all airlines did it

2) dump prices further to public? (already doing that in many cases & not working - some airlines have student fares, under 31 fares, teacher fares) or to the industry ?

3) offer long payment terms by credit card at no interest, where pax might even be paying off their airfares after their trip.

4) all of the above

5) or something else, like free stuff, eg. credit for hotel/cars/trains/theme parks etc. etc. Obviously if pax aren't going anywhere at present, none of these entities will be selling anything.

or 6) offer individual travel consultants incentives like, sell $x of us get free flights somewhere, with a fall back if someone sells just short of the mark.

Many marketing managers are probably under the age of say 45, who were 18 during the last recession & have no idea how to handle recessionary trends.
 
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The downturn for some retailers is because more folks are buying products on the internet. They say 9% of retail sales are thru the internet and are expected to be 20% well before 2029. It is just a big change of how consumers are buying. Then quite a few consumers are using “pay later” methods as well.
Selling the last seats on planes must be the hardest thing for airlines as most flights need to be greater than 80% full just to break even. Advertising and pricing offers have to help.
 
But the point is we should need to have ‘stripped down’ business class, or bidding for upgrades. It costs the airline no more to fly you Europe-Australia return than it does the other way around.

The airlines are just trying it on, as you say..l ‘what the market will bear’.

Well, the market will no longer bear inflated prices to the USA or Europe.

That doesn’t = recession. That = a smarter consumer.

I think it's both. Some travellers - not just the tiny minority who read sites like this - have become more informed.

But per capita, Australians have one of the highest level of debt in the world, so that is leading to stagnant domestic and now international air travel (for journeys originating in Oz.) Some of this expenditure is discretionary, so it's among the first to suffer.

This doesn't mean MEL_Traveller has any debt: you might be like the c.20 per cent who have none and who have significant savings and/or investments, but at the other end there's the 40-45 per cent who should they lose their job, would be in trouble financially within a month.
 
So, shall we start by getting rid of the teachers seeing as you seem to denigrate them continually (some of your worst comments have thankfully been removed by mods)? Or maybe the nurses, bus drIvers, police, NDIS managers, firies, posties, hospital workers, public hospital doctors, mental health workers, meteorologists, ambos, planners etc etc - any more groups you despise?...

One fact is that public sector salaries and wages have been rising faster than for the c.85 per cent plus employed in the private sector. This is unsustainable, unless we want governments to have vastly increased so-called 'bad' debt (i.e. 'good' debt is investing in time-saving or standard of living-enhancing infrastructure.)
 
Sadly, those in the private sector are often underpaid, and as you say, would be on 'the bones of their ar*e', if there's a job loss or serious medical event etc. Good govt debt is being forgone by a need to prove that we can get to some stupid unsustainable surplus.

.
One fact is that public sector salaries and wages have been rising faster than for the c.85 per cent plus employed in the private sector. This is unsustainable, unless we want governments to have vastly increased so-called 'bad' debt (i.e. 'good' debt is investing in time-saving or standard of living-enhancing infrastructure.)
 
I'm not recommending it, but BI at times IIRC has not been far off that mark for return J MEL - LHR. Today though its cheapest return J fare is A$5700 so a long way off.

I've been tracking BI fares for many years and they've never even been close to $2200 (in today's equivalent). If they were remotely that close I'd have taken them :)

I was paying $2700 on Garuda and $4100 on BA's - at the time - brand new Club World flat beds - but that was almost 20 years ago 😲
 
I've been tracking BI fares for many years and they've never even been close to $2200 (in today's equivalent). If they were remotely that close I'd have taken them :)

I was paying $2700 on Garuda and $4100 on BA's - at the time - brand new Club World flat beds - but that was almost 20 years ago 😲

The equivalent of A$2200 in 1998 would in 2018 have been (according to the RBA) A$3696.85. That's an overall 'basket' measure and doesn't give an idea of what air fare movements have been (that at least for international economy, have tended to decrease as airlines have become more efficient - plus competition.) What international J fares have tended to do in 20 years I know not.
 
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The equivalent of A$2200 in 1998 would in 2018 have been (according to the RBA) A$3696.85. That's an overall 'basket' measure and doesn't give an idea of what air fare movements have been (that at least for international economy, have tended to decrease as airlines have become more efficient - plus competition.) What international J fares have tended to do in 20 years I know not.

Indeed - so using that same tool today's $2200 fare may have been around $1400 20 or so years ago. BI hasn't been in that price bracket. Fares at around $3700 ring a bell, but that would be within the last 10 or so years IIRC. But that would have been up against $5000 of so for the majors (quite a lot of money at the time!)
 
The downturn for some retailers is because more folks are buying products on the internet. They say 9% of retail sales are thru the internet and are expected to be 20% well before 2029. It is just a big change of how consumers are buying. Then quite a few consumers are using “pay later” methods as well.
Selling the last seats on planes must be the hardest thing for airlines as most flights need to be greater than 80% full just to break even. Advertising and pricing offers have to help.
IMO a huge chunk of consumers are paying as much as they can off their huge mortgages/debts, rather than buying anything online or in stores. Many stores are having massive sales all the time, so online might not be cheaper.
 
So, shall we start by getting rid of the teachers seeing as you seem to denigrate them continually (some of your worst comments have thankfully been removed by mods)? Or maybe the nurses, bus drIvers, police, NDIS managers, firies, posties, hospital workers, public hospital doctors, mental health workers, meteorologists, ambos, planners etc etc - any more groups you despise?

I find your comments unsubstantiated, inflated, opinionated, simplistic and tedious.
to clarify I didn't mean essential services like police, firies, ambos/drs & nurses, but the rest of the pencil sharpeners, put on by alp govts to their friends
 
Don't worry, they were taken off permanent employment. Then, the work was outsourced to 'consultants' who were paid very much more, but do not show up in the govt employment figures. Looks so much better to those who don't understand these things. However, the 'consultants' love it.

to clarify I didn't mean essential services like police, firies, ambos/drs & nurses, but the rest of the pencil sharpeners, put on by alp govts to their friends
 
Many stores are having massive sales all the time, so online might not be cheaper.

But then it's not really a 'sale' is it? They are just making less profit. The days of finding real 'sale' items is few and far between i reckon.

It's the same with airfares. It doesn't cost airlines any more to fly during peak periods than off peak. And consumers are perhaps wising up to that. Perhaps if the low fares are setting a new benchmark, as you suggested in previous threads... good on the consumer.
 
But then it's not really a 'sale' is it? They are just making less profit. The days of finding real 'sale' items is few and far between i reckon.

It's the same with airfares. It doesn't cost airlines any more to fly during peak periods than off peak. And consumers are perhaps wising up to that. Perhaps if the low fares are setting a new benchmark, as you suggested in previous threads... good on the consumer.
IMO think things have got so bad, that many international airlines make no money in low season & hope high season with offset any low season losses.

Just saw these low airfares in a facebook post

>>>

LAX Insanely cheap in Jan school holidays

Eg.return airfares from Bris, Syd or Mel

12-26JAN from $1256/adult or $ (family 2 adults/2 kids)

13-26JAN from $1126/adult or $3777/family (2A/2C)
14-26JAN from $999/adult or $3577/family(2A/2C)
 
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Ozfflyer, as always can you name names about who is offering “insanely cheap” airfares?
no idea, so looked online & it seems like UA, DL, AA, VA, NZ & FJ. FJ out of MEL sucks as all red eyes which don't connect in Fiji. QF seems to be trying to get more. Good luck with that QF. Don't understand why anyone would pay more to fly QF,

Depart 5-7 days later & back to $800 return with seemingly hundreds of seats acorss all airlines.
 
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IMO a huge chunk of consumers are paying as much as they can off their huge mortgages/debts, rather than buying anything online or in stores. Many stores are having massive sales all the time, so online might not be cheaper.
Really?
Funny that freight volumes are up substantially through some networks already this year and early estimates have predicted this years Black Friday and Cyber Monday sales will break last years records. Someone is shopping online obviously
 
Really?
Funny that freight volumes are up substantially through some networks already this year and early estimates have predicted this years Black Friday and Cyber Monday sales will break last years records. Someone is shopping online obviously
2 days out of 365 does not make a business !!!

Everything I hear, freight is down, way down.
 
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