Why Cheap Fares on Internet Travel Sites?

[Scott Dyer HPN/NY]

A question about the economics involved from the airline's perspective: why would a place like Expedia, or Orbitz, be pricing a ticket at about 60% of the fare being charged by the airlines (the one operating the aircraft, and the code share partner), for a flight months away? It is clearly the same class of service, with the same amenities (e.g., baggage allowance, advance choice of seating, etc.). And, there are many seats left on the aircraft.

Or, more specifically, why would the airline have allocated such seats to the internet site so far out from the travel date at a substantial discount?

[Terry Carraway]

Most times I have seen those same cheap fares on the airline sites.

A few times there was a slightly cheap fare.

[Larry sreyoB]

Or, more specifically, why would the airline have allocated such seats to the internet site so far out from the travel date at a substantial discount?

I haven't seen such a dramatic difference before; but, I spend very little time comparing airfares so that wouldn't be surprising. I can think of two reasons that might explain it.

1. The online agency may have bought a block of tickets at a discount.

2. The airline's yield management has predicted that those seats would otherwise go unsold through conventional channels so they are allowing them to be sold at that discount through the online agency.

Can you post an example?

[Dave Siciliano]

I have seen cheap fares, particularly on hotel sites, that couldn't be booked when I tried. They seemed to be teaser rates to get one to go to that site when there were many choices.

[Scott Dyer HPN/NY]

I haven't seen such a dramatic difference before; but, I spend very little time comparing airfares so that wouldn't be surprising. I can think of two reasons that might explain it.

1. The online agency may have bought a block of tickets at a discount.

2. The airline's yield management has predicted that those seats would otherwise go unsold through conventional channels so they are allowing them to be sold at that discount through the online agency.

Can you post an example?

Larry -- Today, the difference is less extreme, but it's basically $1700 on Expedia for premium economy on DAL8425 and 1020 CPH-CDG-JFK for 9/24 (code share on AF); Delta is showing $2190; AF is showing $2180. Yesterday Expedia was around $1350.

I see now that the Expedia is non-refundable and with change fees, while the airline sites were unrestricted. That must be the difference but it was a surprisingly big difference yesterday.

[Terry Carraway]

Unrestricted makes a HUGE difference.

You may have to reset some options to see such fares online. Or call them. Sometimes the website does not allow you to book some combinations.

For airfare, I use Kayak. They actually hit all the various booking sites, like Expedia, Travelocity, etc. So when you book, it can take you to the booking site, not Kayak.