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Alitalia crazy pricing system (and the problems it can create)

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Alitalia crazy pricing system (and the problems it can create)

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Old Sep 14, 2016, 2:24 am
  #1  
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Alitalia crazy pricing system (and the problems it can create)

At the end of June my company told me I have to attend a two days conference scheduled mid october in BRU, inviting me to plan the trip. For this kind of secondary activities company policies require staff to book flights and accomodations directly, following the guidelines (no business class, keep costs low, if possible direct flights) and travel department will reimbourse the expenses a couple of months later.

Luckily I can choose the airline: for business travel I try to avoid the LCCs and considering that with SN I had a few bad experiences the only direct option for me was AZ from LIN.
In July I started to monitor the fares, comparing the prices of the AZ website (both return ticket or two single legs) plus expedia, skyscanner, kayak, opodo and similar, but in each case the best option was in the range of 520 euros for the return, with no HBO or very cheap fare available. When at the beginning of August I received via email an AZ advertisement offering a 20% off I decided to book on the AZ website for a price of about 415 euros, and forwarded the ticket with the prepaid hotel reservation to my travel department for the accounting.

Now the funny thing: in mid August another colleague was requested to attend the conference with me. He asked me which AZ flights I booked in order to travel with me (and benefit of my CFP status in order to access lounges…). The following day he told me he booked his flights: LIN-BRU at 44 euros and on a different ticket BRU-LIN at 47 euros, both of them on the AZ website for the astonishing fare of 91 euros (was an HBO, non refundable fare). He also told me that on the AZ website the single ticket return fare was sold at 411 euros (cheaper than my 20% off fare) and that on Expedia and Opodo the very same option was available at 76 euros for the return. By the way I also travel HBO and with my flexible ticket the change is 60 euros.

I was not disappointed with the news, but happy for my colleague: anyway this is a business trip and I will receive a full reimboursemnt for the ticket. Unfortunately I underestimated the reaction of the travel department when they received the copy of the tickets of my colleague. They started to ask me why I paid my ticket five times more than my colleague for the same flights and why I didn’t booked a cheaper non refundable HBO fare. They also instilled doubt that I was trying to cheat the company in order to acrrue more miles with an overpriced ticket. Obviously an embarassing and unpleasant situation for me: inside the company I am considered the greatest expert in finding the best and cheaper fares and now I am requested to justify in writing my decisions in booking my ticket. I sent a complaint to Alitalia about their stupid pricing system but, as expected, after 4 weeks, no reply.

After struggling to demonstrate my bona-fide, now the news from my company: starting 2017 new travel policy (more strict and austere) and in the meantime an unofficial travel policy requires when possible to avoid AZ for international travel (unfortunately on domestic AZ has a monopoly) unless is available a very cheap ticket, suggesting as an alternative to use low cost carriers.
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Old Sep 14, 2016, 6:20 am
  #2  
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Originally Posted by Aldebaran
I sent a complaint to Alitalia about their stupid pricing system but, as expected, after 4 weeks, no reply.
I would agree that, IME, AZ pricing on short-haul can indeed be quite erratic compared to most other airlines. However, even if they did answer, what on earth would you expect them to answer? I cannot see how they could answer your complaint by anything other than a bland statement about how prices vary over time and can go up and down.

On the main issue, I must say that I would not have booked a return Y ticket between MIL and BRU three months in advance where the fare is > €500. This would have raised red flags in our finance department too. Our policy is that we have to book the cheapest Y and presumably SN was available for less? If I were to buy such a ticket, I would certainly have cleared it with our financial officer first and got her go-ahead before booking.
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Old Sep 14, 2016, 6:35 am
  #3  
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Originally Posted by Aldebaran
Luckily I can choose the airline: for business travel I try to avoid the LCCs and considering that with SN I had a few bad experiences the only direct option for me was AZ from LIN.
Your company might want to know why you avoided the LCCs - of which there is no shortage plying the routes between MIL and BRU/CRL - particularly given that you apparently don't need to check a bag! Whatever about the cheapest price available on AZ at the time, it clearly wasn't the cheapest ticket that you could have bought!

Edit: seems like they modified their travel policy to emphasise the use of the LCCs!

Last edited by irishguy28; Sep 14, 2016 at 6:52 am
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Old Sep 14, 2016, 8:49 am
  #4  
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Originally Posted by NickB
On the main issue, I must say that I would not have booked a return Y ticket between MIL and BRU three months in advance where the fare is > €500. This would have raised red flags in our finance department too. Our policy is that we have to book the cheapest Y and presumably SN was available for less? If I were to buy such a ticket, I would certainly have cleared it with our financial officer first and got her go-ahead before booking.
I travel to BRU several times per year and with my travel pattern (inbound early morning day one, outbound late afternoon day 2) the fares are in the range of 400-600 euros in economy. With AZ you can find HBO or deeply discounted only for a three or more days stay.
My company knows that and approve, as usual, the budget. This time the problem was my colleague who booked his ticket two weeks later than me, and for a strange occasion he was able to select two single HBO legs at about 45 euros each. When I booked this option was not available.

Dut to this unforeseen circustance my company started to question me about the ticket I bought, even if the price I paid was the best available (and also discounted 20%) and this was not my fault.

Result: AZ is going to lose a 7 digits budget from my company (a big government agency)
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Old Sep 14, 2016, 8:54 am
  #5  
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Originally Posted by irishguy28
Your company might want to know why you avoided the LCCs - of which there is no shortage plying the routes between MIL and BRU/CRL - particularly given that you apparently don't need to check a bag! Whatever about the cheapest price available on AZ at the time, it clearly wasn't the cheapest ticket that you could have bought!

Edit: seems like they modified their travel policy to emphasise the use of the LCCs!
I live 4 minutes driving time from LIN, where I have free parking and many other perks.
Low Cost carriers are in BGY and I don't fancy to wake up a 3 o'clock in the morning, drive one hour, and be in the overcrowded and crazy BGY airport for a 6.30 flight to Charleroi.
Same for MXP, with the problem of the morning or evening traffic.
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Old Sep 14, 2016, 9:05 am
  #6  
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Originally Posted by Aldebaran
I travel to BRU several times per year and with my travel pattern (inbound early morning day one, outbound late afternoon day 2) the fares are in the range of 400-600 euros in economy.
Booked 3 months in advance with SN, they are nowhere 600 euros. More likely to be under 100 euros. I understand that you prefer AZ but I would have to have a heck of a rock solid reason to justify to my employer paying between 4 and 6 times the price to fly AZ rather than another airline.
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Old Sep 14, 2016, 9:16 am
  #7  
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Carriers, including AZ, use RM/IM software to price their tickets. This could be as simple as not being ready to price tickets so far out, so AZ was only selling higher fare buckets 3 months out. Most people booking that far out are price insensitive so AZ can charge what it wants. I know that you say that you are very sensitive to price (or that your employer is), but you are apparently not. If you are willing to spend EUR 350 to depart a more convenient airport, you are exactly the customer AZ wants.

Also, as an example, I took a look at a close-in return MIL-BRU for tomorrow - Friday. Although those tickets can be very expensive, on the three LCC's: FR, U2, & SN, the price was EUR 146-181. But, the lowest ticket on AZ is EUR 732. Looking at end October, the LCC's are in the 30-40 range, while AZ is in the 120 range. Once you move into November, the LCC's are in the 20-90 range, while AZ is in the 450 range. So you can see the bell curve AZ employs. It is far from "crazy". It is quite deliberate.

I can't imagine justifying that differential for a more convenient airport and I suspect that most corporate finance types would be quite upset if they reviewed my travel and saw me spending EUR 732 when the comparable is EUR 146 for a 90-minute flight.

Generally speaking, micro-hauls such as this won't be realistically priced until 4-6 weeks out and even then (unless you are traveling to a destination hosting a major event such as the Olympics or some such).
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Old Sep 15, 2016, 2:06 am
  #8  
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Originally Posted by Often1
Carriers, including AZ, use RM/IM software to price their tickets. This could be as simple as not being ready to price tickets so far out, so AZ was only selling higher fare buckets 3 months out. Most people booking that far out are price insensitive so AZ can charge what it wants. I know that you say that you are very sensitive to price (or that your employer is), but you are apparently not. If you are willing to spend EUR 350 to depart a more convenient airport, you are exactly the customer AZ wants.

Also, as an example, I took a look at a close-in return MIL-BRU for tomorrow - Friday. Although those tickets can be very expensive, on the three LCC's: FR, U2, & SN, the price was EUR 146-181. But, the lowest ticket on AZ is EUR 732. Looking at end October, the LCC's are in the 30-40 range, while AZ is in the 120 range. Once you move into November, the LCC's are in the 20-90 range, while AZ is in the 450 range. So you can see the bell curve AZ employs. It is far from "crazy". It is quite deliberate.

I can't imagine justifying that differential for a more convenient airport and I suspect that most corporate finance types would be quite upset if they reviewed my travel and saw me spending EUR 732 when the comparable is EUR 146 for a 90-minute flight.

Generally speaking, micro-hauls such as this won't be realistically priced until 4-6 weeks out and even then (unless you are traveling to a destination hosting a major event such as the Olympics or some such).
With my seniority in my company I am lucky enough to be able to choose the airline and the flights I want for my business travels, apart some exceptions like the domestic flights (for a LIN-FCO return I can't book a 39 euros AZ flight by myself, but I have to make a request to my travel department, then they will book me a 550 euros return ticket in the most expensive fare bucket). So you can imagine my company is not very price sensitive from this point of view. If my colleague was not supposed to travel with me everything worked fine and everyone was happy with the fare I paid.
The problem arose with my colleague joining me and booking his trip about 10 days later at a price 80% lower than my ticket. At first my travel department questioned me if I was trying to cheat the company, booking a full fare ticket in order to maximise the miles received, but when I demonstrated it was not my fault they were upset with the stupid AZ fare pricing system.

Just to give an idea, for my travel dates, mid october, on AZ website:
LIN-BRU-LIN 423 euros is the cheapest economy classic return fare (no light fares available), but if I buy one ticket each leg:
LIN-BRU 43,23 euros, light fare HBO
BRU-LIN 44,74 euros, light fare HBO
for a total amount of 87,97 euros, and booking on an OTA the fare will decrease at about 72 euros.

With the example above you can see the unpredictability of AZ: in 10 days a company cannot accept a change of the 80% in the air travel fares, and in this case I have to say my company is right. If I need to change my ticket I have to pay 60 euros of fare change plus any difefrence, if my colleague needs to change his ticket he simply throw away his 44 euros ticket and buy a new one.
This is the best way for AZ to alienate its best customers, including companies not very price sentisitive, but for that not dumb or fool.

You, and also NickB on a previous post, pointed out also the SN option: you are right, SN is cheaper than AZ but a few months ago, flying SN on a 400 euros ticket LIN-BRU-TLS for a meeting at an important local aerospace factory, I was offloaded from the BRU-TLS flight because in their system for a strange reason appeared I had not boarded my LIN-BRU flight (funny thing was that they sent me a car waiting for me at the stair of the inbound flight parked at a remote stand to drive me to the BRU-TLS gate because the connection was tight). This, associated with some other bad experiences persuaded me SN is not the best option for a business travel.
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Old Sep 15, 2016, 2:20 am
  #9  
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Deleted, my previous post was repeated due to a tech glitch.

Last edited by Aldebaran; Sep 15, 2016 at 5:13 am Reason: repeated post
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Old Sep 15, 2016, 2:52 am
  #10  
 
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@Aldebaran - I know exactly where you're coming from and can even mention a recent example where I was questioned concerning an airline fare which, in normal circumstances, would have been classed as standard. We do have a free travel policy within our company (large pharmaceutical business) meaning that, unless you are booking a J (long-haul) ticket (where somebody would deliberately look at whether the best price for that particular class of travel does not differ by thousands of Pounds compared to what you're wanting to go for), then you can basically even book C within Europe (up to you not to take the mickey, though, by booking a 600 GBP C fare from BHX to, say, AMS). On a recent (usual, for me) trip to Poland (RZE - that's exactly where I was heading to), I went for the cheapest LH Y fare of ~300 GBP: one of the directors decided to join (at a later stage) and was bragging about going on a ridiculously cheap ticket with FR from EMA (I can assure that he doesn't brag about his BA-only-choice when flying to Japan, even when this is way more expensive than others!). As you can imagine, this situation triggered a few sarcastic comments around the building and I was obviously immediately called in by my boss for a catch-up - I'll let you guess what that was all about

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Old Sep 15, 2016, 5:57 am
  #11  
 
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Beancounters make the rules, you work out of them to make the rules to work for you.
HBO? Not an option. Now question me why I need no to carry my proper luggage.
LCC? Well, the rules miss something very important that any experienced and frequent traveller (including the airlines) know well :-D

Then there are those few unlucky exceptions when Ryanair embraces you with joy :-(

Ulxima
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