Where is the logic SAS [zeroing out booking classes]
Oct 26, 2014, 6:11 am
#1
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Where is the logic SAS [zeroing out booking classes]
I just completed a Demark - LED (Saint Petersburg, Russia) trip in SAS Plus.
The ticket was booked 3 weeks ago. At that time all booking classes were wide open and very reasonable SAS Go and SAS Plus fares were available. SAS Plus was only slightly more expensive than SAS Go, so I went for this option.
As I might had to change dates, I kept watching availability on a daily basis. Overnight approx 2 weeks ago, availability went from wide open to only the most expensive SAS Plus fares available for both my outbound and inbound flights; SAS Go no longer available. I checked other days around my travel dates and it was the same (luckily a date change was not required at the end of the day - it would have been very expensive!)
Expecting that my flights were almost sold out and definitely in SAS Go, I was very surprised to find only 10-12 pax in SAS Plus and maybe 20-30 pax in Go - on SK A320 mind you! For my return flight a few days later, it was even worse; 3 pax in SAS Plus and 10-20 in SAS Go; again on the A320
Needless to state that these LED flights most likely have been lossmaking with only a fraction of the seats sold.
That made me think: Why zero out all cheap booking classes when the flights were not remotely close to being sold out? I appreciate that it is better to sell a expensive ticket rather than a cheap SAS Go (in particularly if not bought well in advance as in my case) but if the consequence is almost no selling of tickets at all, it makes little sense to me.
I might to be wrong, but would it not be better to try to sell more reasonably priced SAS Go tickets rather than to zero out all SAS Go booking classes 2 weeks in advance? Surely, any pax looking for good value would not have purchased SAS Plus ticket at around USD 1,500 r/t when other carriers (e.g. OS, LH, BT) were selling return tickets in the region of USD 350-400; in fact LH had very reasonable V/S class tickets at around USD 350 for BLL-FRA-LED until 1 day before departure and being based in Jutland it would not matter to me if I connect in FRA rather than CPH; the travel times to/from LED is almost the same on LH via FRA, and LH had more connections than the 2 daily SK fights to LED, 1 from CPH and 1 from ARN).
My point is; no surprise that the flights were almost empty when SAS is zeroing out the cheaper fares weeks before the travel date. I certainly can understand why SK is loss making if the revenue management continue like this.
EDIT: Just to add some comments on flights. Good, friendly and personal service on the return flight (it very seldom that I'm adressed by name by the crew - maybe 3 pax in SAS Plus made it easier
). I prefer the more informal and humorous approach by the Nordics FAs rather than to time the robotic and very good but humble service of e.g. Asian FA; I guess it is cultural issue/preference being born, raised and living in Scandinavia.
The ticket was booked 3 weeks ago. At that time all booking classes were wide open and very reasonable SAS Go and SAS Plus fares were available. SAS Plus was only slightly more expensive than SAS Go, so I went for this option.
As I might had to change dates, I kept watching availability on a daily basis. Overnight approx 2 weeks ago, availability went from wide open to only the most expensive SAS Plus fares available for both my outbound and inbound flights; SAS Go no longer available. I checked other days around my travel dates and it was the same (luckily a date change was not required at the end of the day - it would have been very expensive!)
Expecting that my flights were almost sold out and definitely in SAS Go, I was very surprised to find only 10-12 pax in SAS Plus and maybe 20-30 pax in Go - on SK A320 mind you! For my return flight a few days later, it was even worse; 3 pax in SAS Plus and 10-20 in SAS Go; again on the A320
Needless to state that these LED flights most likely have been lossmaking with only a fraction of the seats sold. That made me think: Why zero out all cheap booking classes when the flights were not remotely close to being sold out? I appreciate that it is better to sell a expensive ticket rather than a cheap SAS Go (in particularly if not bought well in advance as in my case) but if the consequence is almost no selling of tickets at all, it makes little sense to me.
I might to be wrong, but would it not be better to try to sell more reasonably priced SAS Go tickets rather than to zero out all SAS Go booking classes 2 weeks in advance? Surely, any pax looking for good value would not have purchased SAS Plus ticket at around USD 1,500 r/t when other carriers (e.g. OS, LH, BT) were selling return tickets in the region of USD 350-400; in fact LH had very reasonable V/S class tickets at around USD 350 for BLL-FRA-LED until 1 day before departure and being based in Jutland it would not matter to me if I connect in FRA rather than CPH; the travel times to/from LED is almost the same on LH via FRA, and LH had more connections than the 2 daily SK fights to LED, 1 from CPH and 1 from ARN).
My point is; no surprise that the flights were almost empty when SAS is zeroing out the cheaper fares weeks before the travel date. I certainly can understand why SK is loss making if the revenue management continue like this.
EDIT: Just to add some comments on flights. Good, friendly and personal service on the return flight (it very seldom that I'm adressed by name by the crew - maybe 3 pax in SAS Plus made it easier
). I prefer the more informal and humorous approach by the Nordics FAs rather than to time the robotic and very good but humble service of e.g. Asian FA; I guess it is cultural issue/preference being born, raised and living in Scandinavia.
Last edited by SK AAR; Oct 26, 2014 at 7:04 am
Oct 26, 2014, 9:00 am
#3
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Sadly very normal for SAS, my company ticketing policy makes us travel the lowest price but we get some leeway. I try to travel SAS as I want the points but as I buy tickets last minute the SAS flight is always at the very top of the price list with Airfrance at the bottom typicially. In the middle is LH so we end up on that one, it is almost always the exact same SAS flight code share with LH.
It is not possible for me to justify catching the same time flight in the same class with SAS for 6000SEK and with LH for 3000SEK.
SAS is a very odd airline, it is quite possible to end up disliking them and being bemused and confused at the same time. The only time they are good is when things go wrong and that is actually quite important and to date they are the only airline that has not gone on strike and abandoned me somewhere ala Airfrance/British airways and last week LH.
It is not possible for me to justify catching the same time flight in the same class with SAS for 6000SEK and with LH for 3000SEK.
SAS is a very odd airline, it is quite possible to end up disliking them and being bemused and confused at the same time. The only time they are good is when things go wrong and that is actually quite important and to date they are the only airline that has not gone on strike and abandoned me somewhere ala Airfrance/British airways and last week LH.
Oct 26, 2014, 10:45 am
#4
Join Date: Sep 2012
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@wazow, nussle
Second that!
Especially suffering with Wazow (probably we have been packed tight next to each other more than once
.
The sad thing is that e.g. LOT offering their flights just one or two hours earlier/later at a quarter of the cost. Since my new TA always reports the cheapest available flight in a 2 hour ticketing window I'm out of luck and see myself flying 90% of my CPH-WAW or CPH-WRO flights on LOT this year. Not sure why SAS doesn't want to have my money here... they know the travel patterns and load factors on that flights.
Same like I see with LX on CPH-ZRH.
It seems SAS still lives in the old days where they could milk last minute business travelers with most expensive tickets as they don't see that the competition is giving away the free space at reasonable prices.
Second that!
Especially suffering with Wazow (probably we have been packed tight next to each other more than once
.The sad thing is that e.g. LOT offering their flights just one or two hours earlier/later at a quarter of the cost. Since my new TA always reports the cheapest available flight in a 2 hour ticketing window I'm out of luck and see myself flying 90% of my CPH-WAW or CPH-WRO flights on LOT this year. Not sure why SAS doesn't want to have my money here... they know the travel patterns and load factors on that flights.
Same like I see with LX on CPH-ZRH.
It seems SAS still lives in the old days where they could milk last minute business travelers with most expensive tickets as they don't see that the competition is giving away the free space at reasonable prices.
Oct 27, 2014, 4:51 am
#5
Join Date: Oct 2014
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Seems perfectly logical to me.
Since most people need a visa to visit Russia my guess is that the number of spontaneous trips to russia booked within 14 days of departure is neglectable.
In other words, those who book closer to departure must go - i.e. those traveling for business. I know of very few who deliberately book longer routes with connections for business trips. When traveling for business time equals money.
Since most people need a visa to visit Russia my guess is that the number of spontaneous trips to russia booked within 14 days of departure is neglectable.
In other words, those who book closer to departure must go - i.e. those traveling for business. I know of very few who deliberately book longer routes with connections for business trips. When traveling for business time equals money.
Oct 27, 2014, 6:39 am
#6
Join Date: Sep 2012
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They seem to operate this way on all other business heavy routes as well so I think you are right. Anyway SAS seems to ignore that more and more companies are not willing to pay high fares as long as there are alternatives like on CPH-WAW or CPH-ZRH
Oct 27, 2014, 10:14 am
#7
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It has nothing to do with visas for Russia. Sometimes it is noticeable for a connection vs. non-stop. Once I booked ARN-CPH-BRU for a reasonable price because ARN-BRU was zeroed in economy and the cheapest one way in eco extra was like SEK 4000. I get to ARN and while in the lounge I see that my ARN-CPH flight is delayed, making my connection unlikely. So I ask them to put me on the non-stop, which departed around the same time. The plane was empty, especially in economy.
Another quirk with SAS is that they actually zero out the fare classes unlike other airlines. For longhaul inside a week before departure the cheapest economy, business class and discount Plus zeroes out. LH or UA might have rock bottom class showing 9, but it would be impossible to book because of advance purchase rules.
Another quirk with SAS is that they actually zero out the fare classes unlike other airlines. For longhaul inside a week before departure the cheapest economy, business class and discount Plus zeroes out. LH or UA might have rock bottom class showing 9, but it would be impossible to book because of advance purchase rules.
Oct 27, 2014, 5:18 pm
#8
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I think raising prices last moment, is fairly well established tactics that many airlines apply. I completely see the reason for that (as well as for the opposite). Without insight into the sales history, it is very hard to see what works better for the finances of the airline. What just bother me, is the empty A320, which could serve other routes well 
. But perhaps the OP has been unlucky (or actually -- very lucky) on the particular departures.
. But perhaps the OP has been unlucky (or actually -- very lucky) on the particular departures.
Oct 28, 2014, 3:31 am
#9
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Another quirk with SAS is that they actually zero out the fare classes unlike other airlines. For longhaul inside a week before departure the cheapest economy, business class and discount Plus zeroes out. LH or UA might have rock bottom class showing 9, but it would be impossible to book because of advance purchase rules.
If we look at ARN-EWR fares for LH, SK and UA.
LH have advance purchase requirements for 15/40 fares
SK have advance purchase requirements for 2/20 fares
UA have advance purchase requirements for 12/31 fares
If you don't have advance purchase requirements you will have to limit the number of seats sold in a certain fare class in another way - an example could be the number of seats available in a cheaper booking class.
I have a really hard time comprehending how it can be smart to have space available in booking classes which is unbookable.
Oct 28, 2014, 4:00 am
#10
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But this strikes to the very heart of revenue management.
Those who are price sensitive and flexible [typically tourist or leisure travel] will book early and travel at off-peak times in order to benefit from the cheapest fares.
Those who who need to travel at short notice or on certain services [typically business travel] will book late, and pay whatever price is demanded.
The airlines are experts at maximising their incomes. The "cheap" tickets come with all kinds of restrictions - non-cancellable; must include a minimum stay (usually of at least a Saturday night); must be booked 21 days in advance; etc etc.
When you check the fares every day, and suddenly notice that fare buckets close from one day to the next, it does not necessarily mean that all avaialble seats in those fares were sold - it just means that the advance sale requirements for those fare buckets are now breached, so it is not technically possible to buy such a seat anymore so close to departure. Those buckets are no longer offered for sale, because it is now too late to meet the necessary advance purchase requirement to buy a seat in this bucket.
By the time the harried business traveller is searching for a seat for tomorrow or this week's meeting, only the fare buckets that don't have restrictive advance purchase requirements will be offered. And if (s)he is looking for same day returns, or return the next day, all those fares that require a Saturday night stay, or any minimum stay that cannot be met based on their travel requirements, will similarly,not be offered to them, meaning that they can only choose from the more expensive fares on offer. The requirements of their itinerary exclude them from being able to select seats from the "cheaper" fare classes.
The airlines MUCH prefer to be able to offer seats at the last minute at a hefty premium, than fill the cabin many weeks or months in advance with travellers booked on very cheap APEX fares. If someone shows up at the airport on the day of travel and is willling to pay a fare equivalent to what 5 of the cheapest travellers paid in total for their 5 seats, don't you think that the airline would want to be able to actually sell him a seat? Rather than have given it away 3 weeks earlier for a far lower amount? Any airline could probably discount all of its seats and have its planes sold out 3 or 4 weeks in advance of travel. But that's not the way to maximise their income. And it's really bad for business if an airline can never supply a seat at short notice for those who are willing to pay a premium.
Flying with empty seats up front DOES NOT MEAN that the airline has made less money than if they filled all the seats at a discount price.
Those who are price sensitive and flexible [typically tourist or leisure travel] will book early and travel at off-peak times in order to benefit from the cheapest fares.
Those who who need to travel at short notice or on certain services [typically business travel] will book late, and pay whatever price is demanded.
The airlines are experts at maximising their incomes. The "cheap" tickets come with all kinds of restrictions - non-cancellable; must include a minimum stay (usually of at least a Saturday night); must be booked 21 days in advance; etc etc.
When you check the fares every day, and suddenly notice that fare buckets close from one day to the next, it does not necessarily mean that all avaialble seats in those fares were sold - it just means that the advance sale requirements for those fare buckets are now breached, so it is not technically possible to buy such a seat anymore so close to departure. Those buckets are no longer offered for sale, because it is now too late to meet the necessary advance purchase requirement to buy a seat in this bucket.
By the time the harried business traveller is searching for a seat for tomorrow or this week's meeting, only the fare buckets that don't have restrictive advance purchase requirements will be offered. And if (s)he is looking for same day returns, or return the next day, all those fares that require a Saturday night stay, or any minimum stay that cannot be met based on their travel requirements, will similarly,not be offered to them, meaning that they can only choose from the more expensive fares on offer. The requirements of their itinerary exclude them from being able to select seats from the "cheaper" fare classes.
The airlines MUCH prefer to be able to offer seats at the last minute at a hefty premium, than fill the cabin many weeks or months in advance with travellers booked on very cheap APEX fares. If someone shows up at the airport on the day of travel and is willling to pay a fare equivalent to what 5 of the cheapest travellers paid in total for their 5 seats, don't you think that the airline would want to be able to actually sell him a seat? Rather than have given it away 3 weeks earlier for a far lower amount? Any airline could probably discount all of its seats and have its planes sold out 3 or 4 weeks in advance of travel. But that's not the way to maximise their income. And it's really bad for business if an airline can never supply a seat at short notice for those who are willing to pay a premium.
Flying with empty seats up front DOES NOT MEAN that the airline has made less money than if they filled all the seats at a discount price.
Last edited by irishguy28; Oct 28, 2014 at 4:05 am
Oct 28, 2014, 4:43 am
#11
Join Date: Sep 2012
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I fully understand and totally agree to the strategy BUT
1) As said, companies and business travelers nowadays do not pay whatever is asked anymore without very good reason (like no other option, which brings me to point 2)
2) What I see is that there usually are options much cheaper... e.g.
Outbound I can even stay the night in the Hilton CPH and be cheaper on the LOT.
Perhaps (which is likely on this route) Go is really fully booked. Still the pricing doesn't make sense to me. For just ~300SEK more I get Business class (4,256.00 SEK to 4,341.00 SEK) on LOT with guaranteed free middle seat and decent service. Why should I bother for SAS Plus? Only reason for me is, the 2500 Points to EB... Not convincing for my boss
1) As said, companies and business travelers nowadays do not pay whatever is asked anymore without very good reason (like no other option, which brings me to point 2)
2) What I see is that there usually are options much cheaper... e.g.
Code:
Nov 4, CPH-WAW: LOT 07:00 - 08:20 1212:- SAS 08:20 - 09:40 3983:- LOT 09:30 - 10:50 1888:- SAS 15:35 - 16:55 3983:- LOT 18:30 - 19:50 2394:- SAS 22:55 - 00:15 3983:- Nov 6, WAW-CPH: SAS 06:15 - 07:35 3899:- LOT 07:20 - 08:50 1593:- SAS 10:10 - 11:30 3899:- LOT 16:20 - 17:50 2133:- SAS 17:25 - 18:45 4450:- LOT 20:30 - 22:00 1593:-
Perhaps (which is likely on this route) Go is really fully booked. Still the pricing doesn't make sense to me. For just ~300SEK more I get Business class (4,256.00 SEK to 4,341.00 SEK) on LOT with guaranteed free middle seat and decent service. Why should I bother for SAS Plus? Only reason for me is, the 2500 Points to EB... Not convincing for my boss
Last edited by fassy; Oct 28, 2014 at 4:51 am
Oct 28, 2014, 5:34 am
#12
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There is ALWAYS another option - not to travel at all.
For the leisure traveller, this would probably mean postponing the trip til a future, cheaper date; or switching to an alternate destination.
For the business traveller, this decision is not as easily reached. Either they have to be there at the meeting/conference/customer visit, or they lose the business entirely.
Looking at one day's fares is perhaps not the most instructive. The system is what it is, and if it wasn't working for the airlines, then more of them would have abandoned the system. There certainly are people who would probably look at that screenshot and decide to stay overnight and take the early LOT flight. But once 2 more tickets are sold on that flight, the situation will have changed entirely, once again.
The prices are dynamic - you're not going to learn much about looking at one, frozen snapshot.
For the leisure traveller, this would probably mean postponing the trip til a future, cheaper date; or switching to an alternate destination.
For the business traveller, this decision is not as easily reached. Either they have to be there at the meeting/conference/customer visit, or they lose the business entirely.
Looking at one day's fares is perhaps not the most instructive. The system is what it is, and if it wasn't working for the airlines, then more of them would have abandoned the system. There certainly are people who would probably look at that screenshot and decide to stay overnight and take the early LOT flight. But once 2 more tickets are sold on that flight, the situation will have changed entirely, once again.
The prices are dynamic - you're not going to learn much about looking at one, frozen snapshot.
Oct 28, 2014, 7:55 am
#13
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Right, but believe me... I'm doing this long enough to see some common patterns - and SAS is one of the worst for last minute purchases (or even not so last minute because like 5 to 10 days out is not last minute to me)
Oct 28, 2014, 8:02 am
#14
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There are any number of reasons why SAS may decide not to "reduce" the price in the last hours before departure, especially for flights from one of its hubs.
If SAS acquired a reputation for dropping the price of SAS Go tickets in the final hours before departure, for any or ALL of their routes from one or ALL of their hubs, then it would eventually hurt their revenues, as their regular customers would learn to hold off buying tickets until the last available moment in the hopes of getting a "bargain" (this is deflationary economics in action - why buy now, when you believe the price is going to fall in the future?).
LOT are not based at CPH, so they can afford to be a little more aggressive on pricing - they don't dominate the market at CPH at all, so they can be more bullish.
If SAS acquired a reputation for dropping the price of SAS Go tickets in the final hours before departure, for any or ALL of their routes from one or ALL of their hubs, then it would eventually hurt their revenues, as their regular customers would learn to hold off buying tickets until the last available moment in the hopes of getting a "bargain" (this is deflationary economics in action - why buy now, when you believe the price is going to fall in the future?).
LOT are not based at CPH, so they can afford to be a little more aggressive on pricing - they don't dominate the market at CPH at all, so they can be more bullish.
Oct 28, 2014, 12:57 pm
#15
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Mind also that corporate agreements do not necessarily suffer from these rules and that there is plenty of last minute travel from people that de facto end up on SAS. There is usually a reason for such behaviour.
The few times it bothers me is last minute TA business which just becomes unjustifiably expensive and I usually end up on another airline or if it becomes really extravagant in Plus.
The few times it bothers me is last minute TA business which just becomes unjustifiably expensive and I usually end up on another airline or if it becomes really extravagant in Plus.