 o,
you were thinking that I was going to recommend airline stocks that
would benefit from the current turmoil in air travel. Well, no such
luck. As an aggravated airline passenger, I m here to pitch some common
sense economics rather than the academic kind (which is the kind that
usually leaves you confused and irritated).
My goal today
is to help the business traveler overcome the built-in fare bias
of an airline overcharging on ticket prices only because
a company is picking up the tab. When you're a large company, penny
pinching may not be a priority. But the owners of small businesses
have to bear the brunt of the usurious fares that are charged for
trips of short duration, or the ones not planned well enough in
advance.
But there's
a way around these fares: the Internet. Initially, companies like
Expedia and Travelocity dominated the Internet-booking websites,
but in short order discounters such as Priceline.com and Cheap Tickets
moved in to capitalize on travelers who had great flexibility in
flying time. Individual airlines such as Southwest introduced their
own booking services. The latest fad is Orbitz, a ticket-selling
website that has been created by a number of major airlines. Using
one or more of these services can provide some interesting opportunities
to substantially reduce the cost of flying.
Note: I am
deriving my recommendations for finding cheaper fares from my own
Internet experience. As I will relate below, I am highly confident
that a business traveler who cares about what is being paid for
an airline ticket will benefit from adopting my approach.
The story begins
with the decision to fly from Hilton Head, South Carolina, to Charlotte,
North Carolina, an approximate one-hour trip for a two-day business
meeting. The only airline flying out of Hilton Head is U.S. Airways
Express, and it only flies to Charlotte. When I priced the ticket
I almost keeled over. It was $802. I knew that the absence of competition
wouldn't help me find a good price. But $802 for a one-hour flight?
On a puddle jumper to boot? Forget it! No way! I m going to drive
to the Savannah, Georgia, airport — a not-too-bothersome, 45-minute
excursion — and fly to Charlotte from there. Since Savannah
has quite a few airlines, I figured I d get a reasonable deal. Well,
no such luck. The round-trip fare was $747. Ouch!
Fortunately,
Orbitz — the big brother airline ticketing service — offers
a listing of all possible flights that go from point A to point
B. For the avid traveler who has plenty of time, you probably could
go from point A to point B with five stops in between and see the
country at a whopping fare discount. But that s a story for another
time.
Well anyway,
here is the strategy:
First, I noted
that for the heavily traveled route of Savannah to Atlanta, tickets
were extremely cheap due to competition. Delta competes head on
with a discounter (Airtran), so round-trip tickets for short time
periods are pretty reasonable — in this case $135. So, you
ask, why am I pricing a ticket to Atlanta when I want to go to Charlotte?
Good question!
The airlines
seem to be so interested in providing service to and from anywhere
that my old friend U.S. Airways offers a flight from Savannah to
Atlanta through Charlotte. Now things are cooking. I can
now book the flight from Savannah to Atlanta and get off in Charlotte
— feigning ignorance. And, if I play my cards right, I ll get
back on the plane in Charlotte the following day hoping that I won
t get bounced because I didn t come from Atlanta. Even in the worst
of all cases, I can buy a one-way ticket from Charlotte to Savannah
for $371, still a lot lower than the $747 U.S. Airways was going
to charge me.
If this story
sounds confusing, just look at the numbers: Instead of paying an
outrageous $747 for a ticket, I paid $135, a discount of 82%. How
bad is that?
So now you
know a little more about applied economics. The real deal.
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