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Airline Mismanagement

You've probably had it happen to you - an airfare that you were hoping to book and buy suddenly disappears in the short time between first finding it and then deciding to buy it.

How and why does this happen?  Is it a trick?  Or did someone beat you to the last seat on the plane by a second?

 
 
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How and Why Air Fares Change When You Go to Book Them

Bait and switch?  You decide.
 

One minute it is there; the next minute it has gone, and the wonderful low fare you found has now been replaced by a nasty expensive price for your planned travels.

 

 

Is it Murphy's Law?  Is it bad luck?  Did someone else take the last seat at the low price you found only a minute before for the air travel you were researching?

Or is this some type of sinister bait-and-switch by online travel companies and the airlines, leading you in with a low fare, but when you then decide to buy it, trying to then force you into a higher fare?

Here's an explanation of what is happening.  You can decide if it is fair, honest, and excusable or not.

The Problem of the Vanishing Low Air Fare

So there you are; you've just spent half an hour or more researching the cost to fly somewhere, and you find the lowest possible fare somewhere on some website.

You double check the dates and times, and all looks good.  So you click to book the travel at the low fare you've found, and after a pause, the system comes back to tell you that the fare is no longer available.  It helpfully offers you an alternate fare, typically substantially more than the fare you'd been offered just a minute or two ago.

While it seems understandable that perhaps the last seat at the low fare you saw just a minute or two ago sold out in the brief time between the fare being displayed and you going to book/buy it, the chances of that happening are slim to none.  There is some other factor influencing the disappearance of the seat/fare you were offered just a minute or two prior.

What are the chances of 'your' fare being sold out in the five minutes between seeing it and trying to buy it?

Think about it this way - a typical plane with maybe 175 seats on it has its fares available for sale for about 330 days.  If the plane departs with 165 of the seats sold, that means that, on average, one seat was being sold every other day.  In other words, airlines typically sell not one seat per flight every other minute, but one seat every other day!  Sure, there are some times when seats sell more quickly and some times when seats sell more slowly, but in general it is fair to say that at least an hour or two or three can always pass between one seat being sold and the next seat being sold.

If you think about it some more, the chance of the fare you've found just a couple of minutes ago being sold in that short time frame is even more remote.  Even if someone did buy another ticket between when you first saw the fare displayed and when you went to buy it, there are two more considerations.

Firstly, maybe the other person bought a different type of fare, which still left all the seats allocated for your type of fare untouched.

Secondly, maybe the other person did buy a seat in your fare type, but maybe there was more than one seat remaining, so all that happened should be the number of seats available reduces from 2 to 1, or from 25 to 24, etc; with there still being a seat available for you.

So, the chances of the seat/fare you saw being advertised as available five minutes ago disappearing in five minutes are as close to zero as make no difference.

But, if you're like me, you will occasionally - not always, but sometimes - have a situation where a fare disappears on you as described here.

What's up?  What's going on?

ITA - The Industry Secret

To understand what is happening to the availability of fares, you need to understand some of the behind the scenes activity that occurs between the airline computers and your computer screen.

Enter ITA Software - a company formed in 1996 and an important behind the scenes participant that powers many of the online travel agencies' airfare search engines.

When you query the cost and availability of flights through, eg, Orbitz, Orbitz generally does not in turn go out and ask all the airlines for information about the flights and fares they have available.  Sure, in theory, Orbitz could do this, but it would cost it some money to do so, because (in simple terms) the airlines charge every time someone like Orbitz queries their database.

Instead, Orbitz asks ITA Software for the information.

ITA itself goes out and queries airlines on availability and fare information on a regular basis, and then stores this information in its own databases.  So when it receives a query from Orbitz (or any other user of its services) it accesses its own cached data to provide the answer.  The way that ITA adds value (and makes money) is that in theory it is only querying the airline databases perhaps once every two or three (or five or ten) queries it in turn receives from online travel agencies.

So it can afford to charge for queries to its database at a rate less than what the airlines charge, and still make a profit, because in effect it hopes to be reselling each airline query that it does several times over, albeit at a lower cost per query.

By only querying the airlines directly every few hours (or sometimes even longer) ITA is relying on the same point we calculated before - seats sell slowly on flights and most of the time, it is satisfactory to rely on data that is some minutes or hours or even a day old.

The online travel agencies seek to obscure this part of their business model.  When you are being told that the fare you wanted to buy has gone and now there is a higher fare, they don't explain 'Sorry, but we relied on information that might have been as much as a day out of date when we told you about what was available a couple of minutes ago.'  Instead, they obfuscate and give the impression that the fare they told us about a minute ago truly was there, then, but disappeared in the short time between then and now.

(Note :  Google purchased ITA in early July 2010.  For an interesting insight into the possible implications of this purchase, see our article 'Are the Airlines Seeking to Create Unique Fares Custom Priced for Every Passenger?')

The Availability/Fare Information You See Might Be Out of Date

Now that you know about ITA, you can understand that when you ask an online travel website for airfare availability, the information you get back may not be up to date.

When you ask for an airfare quote, the website queries ITA and returns information from ITA.  The information from ITA might be fresh, but it might also be an hour or even a day old.

When you then go to book the airfare, the website next goes direct to the airline to book/buy the space you request.

And so, for the first time, you are then getting connected directly to the airline and its realtime seat/fare availability information.  Most of the time it will be the same as what ITA projected it to be (remember the worked example above showing that fare availability really changes very slowly) but because there is not just a few minutes of delay, but potentially up to a day of delay between the initial availability information from ITA you saw a few minutes before and the realtime information direct from the airline, there is a magnified chance of the fare having been sold out.

More often than not, if there have been more seats sold in the intervening time, this will probably reduce the availability of the lowest fares and might cause a problem.

Very rarely the fare has dropped not risen

Rarely the opposite may occur and the fare drop.

An airline might decide that a flight is selling too slowly and so might release some more seats into a cheaper fare category.  Or perhaps they have had a group cancel off a flight, releasing a large block of seats back into unsold inventory.

These events are however comparatively rare - almost by definition, if an airline has sold out of the cheap seats, then the flight is selling/filling well and the airline rarely adds more cheap seats at a later date.

So - Bait and Switch or Bona Fide?

Every internet travel website that shows air fare information could in theory show more uptodate information if it was willing to pay the airlines to directly query their database every time you asked the website about availability.  They choose not to do this so as to save themselves money and so as to draw us in to their site.

The cost they are saving is something under 1c per query.

Oh - and the airlines?  The cost to them to provide the data in the first place?  Minute fractions of a cent.  Computing power and data bandwidth is so inexpensive these days that one can only guess if the cost is 1/100th of a cent or perhaps 1/1,000th of a cent to answer each query.

To put this another way, the reason we get invalid information is because the online web travel agencies have made a financial decision to present us with the cheapest rather than most accurate data, and they do this because the airlines and the intermediary services that move the data between the online agencies and the airlines have all decided to profit from our attempt to buy, and the online travel agency's attempt to sell, an airfare on behalf of the airline.

For us as customers, the situation is simple.  We ask a source of airfares for the lowest available fare.  The source tells us.  We promptly respond and say 'Okay, I accept this offered fare, here is my credit card' and are then told 'Sorry, we were wrong, there actually aren't any seats at that price at all.'

Do you think it is fair and proper and honest to offer airfares for sale when the company offering the airfare doesn't really know if the airfare is available or not?

Do you think it is fair and proper that when the company offering the airfare gets it wrong and the airfare has gone, we should be the ones that carry the cost of their error, rather than the company which can't now make good on its promise/offer of only a minute or two before?

Shouldn't there be a law against offering something for sale that in reality doesn't exist?

Is this a bait and switch? You decide.

Note

I've deliberately simplified some parts of the explanation of air fare displays and related issues here, so as to make an arcane subject approachable and understandable, and I hope you'll agree that the simplifications do not detract from the validity of the explanation I offer.

If you disagree or wish to add to the discussion, feel free to post your own thoughts on the blog entry related to this post here.

 

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Originally published 23 Jul 2010, last update 28 Nov 2012

You may freely reproduce or distribute this article for noncommercial purposes as long as you give credit to me as original writer.

 
 
 
 
 

 


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