(Image from a recent ebay listing)
OK readers… its quiz time with
your quizmaster the Professor (doing my world famous Bamber Gascoigne impersonation). Cue the music.
Fingers on the buzzers…
Question 1: Please can I ask how
many of you have ever invoked a price guarantee of the lowest fare on an
airline? Go on – I’ll wait. (Cue
Jeopardy music).
I am really interested to see if anyone was successful so far ZERO.
Question 2: We let’s see how
many of you have actually tried? Hmmm same thing.
Well I have tried many times.
And always the same. Sorry you didn't meet the requirements of the guarantee.
Fortunately for me – I am in North America where I can legally cancel within 24
hours.
Question 3: How many airlines
guarantee their priced availability displays. Time’s up?
Yes the correct answer is
ZERO. So far I have not found one airline willing to guarantee their offers.
At the end of round one –
everyone has scored zero.
The arcane complexity of
airline pricing has evolved over the years into making a number of people a lot
of money. (Consider ITA software). Perhaps the biggest conundrum is that
airlines have succeeded in one key metric. Consumer confusion. No one has any
idea of which price is the right one especially since no one guarantees the
price. In most markets (the USA is somewhat of an exception) the percentage of
offers that are actually purchasable is somewhat astounding at how low a
figure. US Fares tend to be a lot more reliable as they are simpler in point to
point products. On any international system the differentials in pricing is
quite astounding. I have recently reviewed a number of prices on Asia (TC3)
city pairs. Here are some common observations:
- Price granularity is actually quite rare – so you cannot see what the breakdown is of pricing.
- Prices change frequently
- Pricing accuracy is often obfuscated by the fact that few buy the rack price cheapest.
- Taxes are frequently invoked in out of order sequences (lord knows how the tax man can audit that)
- The differentiation of what constitutes a “tax” and what constitutes a “fee” is always obfuscated.
- Etc etc
Having worked in pricing and
fares for many years I remain unsurprised at the extent to which vendors
(particularly OTAs and other intermediaries) do not follow the prescribed
rules. The fact is that the rules are really unreliable. I have written before
on how airlines also permit price “guarantees” which can claim to be lowest
when the prices differ. While frequently these variations are within a few
cents/pence in reality the differences in pricing are all over the shop. And we
wonder why consumers have very low confidence in airline prices.
Dynamic pricing will change
all that right? Probably not – I would not hold your breath because I doubt airlines
will actually guarantee any of the offers despite the fact that they are able. I
encourage you to go back and read some of my previous blog entries just go to
the search bar and enter the word << Pricing >>.
NDC can make this better but I
sincerely doubt that it will do so in the short term.
It is high time that we see
that someone will provide some sanity to the world of airline pricing if we are
going to bring trust back to the airline brands. Will that happen?
Don’t hold your breath. And I
won’t be able to hurry you, or the monkey … or them (yes you know who you are).
