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Why do corporate travel airfares increase in such a short period of time?

Why do corporate travel airfares increase in such a short period of time?

One of the most frequently asked questions to me by clients is “Why do fares increase from one minute to the next?”. I found a way of explaining it by using the below aircraft diagram.

Why do corporate travel airfares increase in such a short period of time?

Economy class is the lower level of pricing for airlines and is built up of approx. 12 different booking classes (this does vary from airline to airline). The bookings are listed by letter, with the letters used to identify example booking codes in a particular class or inventory (the letters also vary per airline). Using the above example, “G class” is the lowest possible fare,  with the airline selling a set number of seats at this fare level. Once these seats are sold, the class will then move (as per the example) on to O class and so on until all that is left is Y class. This final class is your fully flexible fare and comes with a hefty price tag.

Using this principle,  if a client calls up in the morning and there are only 2 seats left in G class at £180 then calls back in the afternoon to find that they have gone, then they may well  be on to the next fare level (O class), and this is often why fares increase.

The same principal works within the other cabins too, although there are usually slightly less booking classes within premium economy and business classes. So for example, if a customer calls to book a flight and a consultant quotes them a Business “I class” fare of £1900, only to find that when they call back a few days later to make a booking the original fare level in “I class” is now full. This means that fares are only available in next fare level or even the one above that if the flight is particularly busy resulting in a fare increase.

As you move up the fare levels, they do tend to have less restrictions the higher the fare you pay. Sometimes clients will advise their travel management company that they need fully flexible fares - so even if the lower classes are available these are not always suited to everyone’s requirements.

Travel Management Companies’ consultants and online booking tools, work directly into a Global Distribution System (GDS) that links to hundreds of airlines worldwide. This enables them in many instances to provisionally hold seats in some booking classes for a limited period of time, usually between 24 and a maximum of 72 hours. This enables you to secure the fare you want whilst sorting out the finer details of your business trip and ultimately save money compared to waiting till you book, something you cannot do if booking yourself via the web.

Taking all of the above into account, it is still best practice if and when you can, to book your business travel requirements as far in advance as you can, before the fare you require becomes increased. A good Travel Management Company will advise on the best options for you giving you the best price available and provide meaningful data to track the savings you have achieved for your organisation.  

Business Travel Glossary

 

About Vicki Nutbrown

Vicki is the Operations Manager for the Hull Team and has worked within the Travel Industry for 19 years. Vicki’s extensive knowledge and experience is passed down to her team ensuring first class service is provided to new and existing clients.
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