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distressed inventory-how do airlines get rid of seats ?

dajop

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It will be interesting to see how EU progresses. $900-$1000 fares on BI to LON have been quite common, but also the later you get (move into July) the fares seem to be going up higher. Early bird fares are typically around the $1000-$1300 mark for shoulder travel, so it remains to be seen what the fares they are selling will be early next year for travel in the European summer.
 

ozfflyer

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I have read elsewhere that allegedly leisure traveller bookings from Oz to Europe for 2020 (given that many book well in advance because they go on river or ocean cruises) are depressed. What that means in reality for airline load factors is something we'll discover once BITRE issues its statistics for those months.

I've not seen super cheap fares from CX: it seems to always be (and still is) one of the more expensive Asia Pacific airlines ex Oz.

Clearly consumer spending in Oz is variable depending on the industry but some discretionary sectors such as take away food are not doing well, so if we lump in international airfares in that category, that may explain Ozflyer's hypothesis. The lower A$ does not help.
lower AUD$ ?

Right now, it's off a massive 3% from average of last 8-10 months. Tomorrow it'll probably jump a cent, Monday it will come back again. It's all over the place.

Paid a U.S. account yesterday by card & got exchange of 0.685.

3 hours later it was down a cent.
 

ozfflyer

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It will be interesting to see how EU progresses. $900-$1000 fares on BI to LON have been quite common, but also the later you get (move into July) the fares seem to be going up higher. Early bird fares are typically around the $1000-$1300 mark for shoulder travel, so it remains to be seen what the fares they are selling will be early next year for travel in the European summer.
school/uni holidays start around June 19. Typically ? What does that even mean these days ?
 

offshore171

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Also had a look at flying to Italy, specifically MXP. At start of school holidays in mid June 2020 can fly full service carrier to MXP returning 3 weeks later for $1100.

To me, that's insanely cheap.
You've got your dates wrong. School holidays start 4 July in NSW and 27 June in Qld.

For example if you use the correct 27/6 start date of the QLD school hols for BNE to MXP, the price is MUCH higher than the mid june price which is well before school hols.
 

dajop

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school/uni holidays start around June 19. Typically ? What does that even mean these days ?
Typically! Means that if I checked this in 2018, for travel mid year 2019, you'd expect similar prices for travel mid June. Ditto with Sep 2017 for travel mid June 2018. I don't think $1k fares are that uncommon for travel in shoulder period, booked 9 months in advance. Get your time machine out to travel back in time to here: Europe Early Bird Sales Released for 2019 :p
 

ozfflyer

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You've got your dates wrong. School holidays start 4 July in NSW and 27 June in Qld.

For example if you use the correct 27/6 start date of the QLD school hols for BNE to MXP, the price is MUCH higher than the mid june price which is well before school hols.
most private schools & QUT start holidays June 19 & of course fares go up when school/uni holidays start. Many parents will depart a few days earlier to save a fortune.
 

ozfflyer

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Typically! Means that if I checked this in 2018, for travel mid year 2019, you'd expect similar prices for travel mid June. Ditto with Sep 2017 for travel mid June 2018. I don't think $1k fares are that uncommon for travel in shoulder period, booked 9 months in advance. Get your time machine out to travel back in time to here: Europe Early Bird Sales Released for 2019 :p
so that suggests that the recession in travel, started earlier. Am sure 3 years or more ago, you would never have seen anything to EU under $1500/adult.
 

dajop

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so that suggests that the recession in travel, started earlier. Am sure 3 years or more ago, you would never have seen anything to EU under $1500/adult.
I really don't know what sort of logic you are using to reach these sort of conclusions. Might be worth considering some basic economics. Very simple, lot of capacity in the market, sales early to bring in cash and secure loadings, drip fed according to yields. Charge a lot more closer to departure, fill up business class seats to provide the cream.

Also for the last few years we have seen:
1) lower fuel prices than previously
2) squeezing in more seats into planes
3) cuts to catering and onboard services
4) the adoption of more fuel efficient 787's and A350's

So you are lowering costs, you can also lower fares and still make similar amount of money, or more, if the planes are fuller ...

If you''ve travelled, or tried travel last minute during the last 3 years around shoulder or peak to Europe, that despites these earlybird fares, planes have been full and expensive. Which means we've gone full circle to Melburnian1's comments that we have to wait until next year to see whether indeed demand to EU is depressed or not.
 

ozfflyer

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if flights are only 1/3 to 1/2 sold right now for January departures after January 7, airlines are going to have one hell of a time selling the remainder only 3 1/2 months out, with all the recession talk, many must be reducing their spending on things like travel & pushing any available funds into mortgages.

So that's why the airlines need to come up with something they haven't done before to move them.

What about 3 years interest free ? That sort of deal sells a few TVs.
 
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odysseus

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if flights are only 1/3 to 1/2 sold right now for January departures after January 7, airlines are going to have one hell of a time selling the remainder on 3 1/2 months out, with all the recession talk, many must be reducing their spending on things like travel & pushing any available funds into mortgages.

So that's why the airlines need to come up with something they haven't done before to move them.

What about 3 years interest free ? That sort of deal sells a few TVs.
That's 4 months out. It's normal for international flights that far out to be 1/3 to a half full.

It's also the latter half of the school hols; that's also known for having less demand than the first part as people leave earlier to maximise their time away, or go away during forced leave in Christmas/NY, or with friends/relatives when that time is better.

Not seeing anything odd so far.
 

ozfflyer

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That's 4 months out. It's normal for international flights that far out to be 1/3 to a half full.

It's also the latter half of the school hols; that's also known for having less demand than the first part as people leave earlier to maximise their time away, or go away during forced leave in Christmas/NY, or with friends/relatives when that time is better.

Not seeing anything odd so far.
XMas Day is just over 3 months out. Late December bookngs are also awful. We're talking school holidays not low season & flights should be 80-90% sold by now.

Actually think interest free payments over a long period might work. Say a family of 6 airfares cost $5k. A$499 charge per month for 10 months on a credit card might seem doable for many who don't have cash in the bank or $5k available credit.
 

dajop

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XMas Day is just over 3 months out. Late December bookngs are also awful. We're talking school holidays not low season & flights should be 80-90% sold by now.
How do you know, and what airlines are you talking about? Looking at QF fares SYD-LAX departing late December you're looking at $2400 or so return. I'm sorry to me that doesn't suggest that "late December bookings are also awful". Looking at ExpertFlyer for the fare availability, QF, AA & DL all seem to have quite respectable transpac loadings, during the week after Christmas. VA and UA not so good, but even the fares I saw were around $2100 return on those dates on VA. Hardly deep discounting going on to correspond with the awful bookings.
 

p--and--t

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XMas Day is just over 3 months out. Late December bookngs are also awful. We're talking school holidays not low season & flights should be 80-90% sold by now.
Given the stats often distributed on AFF show that load factors on airlines that are doing well seem to average out at 80%, why would you expect flights to be 80-90% sold out now three months before the dates you are referring to?

The airlines themselves don't seem to agree with you seeing they are not slashing fares. Sure there are discounts around, but they appear every day of every week throughout the year somewhere in the system to stimulate demand.
 

dajop

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The fares ex-MEL are below. Cheapest CX then Xiamen. Cheapest on the non-stops between the two continents seems to be VA @ $1862. Hardly representative of distressed inventory:

kayak.jpg
 
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ozfflyer

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Given the stats often distributed on AFF show that load factors on airlines that are doing well seem to average out at 80%, why would you expect flights to be 80-90% sold out now three months before the dates you are referring to?

The airlines themselves don't seem to agree with you seeing they are not slashing fares. Sure there are discounts around, but they appear every day of every week throughout the year somewhere in the system to stimulate demand.
looked at December 29 ex SYD, back 3 weeks + later & seemed to be plenty of $1500 seats/adult & $1125/child. Last few days of December are often quite days as for some reason, many seem to want to go & watch fireworks & then fly early January. They are just fireworks
 

MEL_Traveller

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Part of the issue with river cruises giving free return flights - cruises are seemingly $6k+. If someone sees return f ares for $1k, even if not when they were looking to go on a river cruise, it makes the cruise $5k+ seem expensive.
The cruise isn't $5k and the airfares aren't 'free'. The 'cruise only' component regularly sells for around $3000. So the $3000 extra for a 'free' airfare isn't what it seems. (I don't know why the ACCC doesn't look into this type of advertising.)


so that suggests that the recession in travel, started earlier. Am sure 3 years or more ago, you would never have seen anything to EU under $1500/adult.
Not necessarily. In addition to the reasons Dajop has given... this could also just mean greater competition.

It costs no more to fly a plane during peak period than it does off peak. If a company increases its prices, the laws of competition dictate that other companies will enter the market to take some of that profit. So instead of Qantas being able to charge $3000 to London during school holidays, Xiamen comes in and charges $1000. Qantas will likely need to respond.

So lower airfares could just be competition at play.
 

albatross710

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Do you mean Michael Eugene Porter an American academic ?
t
Yes, he's still the man for strategy. In summarising this thread we really haven't yet decided on the question to be resolved.

Is there really a slump in seat numbers?


Step 1: Solve the right problem.
 

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