Supply & Demand - what gives?
So we're told that demand for air travel is way down. Flights on many routes are wide open. We know that business travel has been devastated - which really impacts the business class cabin and premium economy internationally. Oil prices are also at a decades low.
Yet: fares from here till May are at an all-time high. What gives? What happened to the supply and demand principle? I've also noticed (at least on international routes) that the difference between basic and flex is ridiculous, sometimes a 1k or more! Sometimes flex is almost the same as premium economy........? I am puzzled, anyone have any ideas as to why? |
Also a bit puzzled.
Looked at some short domestic routes (intra-BC) Also YVR - AKL for April. Nottttt cheap at all! |
The logic is that if you're trying to book travel now, you must really need to go. It's not just AC, it's all sorts of airlines and hotels.
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Don't confuse the laws of supply and demand with revenue management.
Why lower prices if people aren't going to travel regardless of how cheap the fares. How many of us would go to FCO if J was $1000, minimum stay is 72 hours, and be subject to a 2 week quarantine on the return? |
Wonder if, and yes big if, it's a combination of:
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Originally Posted by tracon
(Post 32176758)
Don't confuse the laws of supply and demand with revenue management.
What has happened is that whereas demand is normally fairly related to price (i.e. as prices go down, demand goes up, and vice versa), demand is currently become relatively inelastic, i.e. the demand curve is much flatter (and lower overall). The rest of your post is an excellent illustration of that flattening of the curve :) |
I only draw my graphs with Q on the x axis 😎
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If prices went down I'd be willing to buy a few non-refundable fares totaling ~$10k.
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Originally Posted by SparseFlyer
(Post 32176818)
I only draw my graphs with Q on the x axis 😎
Originally Posted by canadiancow
(Post 32176843)
If prices went down I'd be willing to buy a few non-refundable fares totaling ~$10k.
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Originally Posted by canadiancow
(Post 32176843)
If prices went down I'd be willing to buy a few non-refundable fares totaling ~$10k.
Lol I told him that I would fly out to BC to do a segment run with him if prices dropped significantly. Call me crazy, but I am taking that 0.2% death rate for young people pretty seriously :p |
Originally Posted by codfather
(Post 32176915)
marke190 and I were literally saying this the other day...
Lol I told him that I would fly out to BC to do a segment run with him if prices dropped significantly. Call me crazy, but I am taking that 0.2% death rate for young people pretty seriously :p Forget segment runs. Come fly Europe to Australia and back or something. |
Originally Posted by Adam Smith
(Post 32176752)
It's not just AC, it's all sorts of airlines and hotels.
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Originally Posted by totti
(Post 32177069)
You are correct regarding air fares. Hotels are a different story. I just checked rates for LA for the weekend and prices dropped by close to 50% compared to 2 weeks ago. Same for Whistler where prices are also down.
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Originally Posted by canadiancow
(Post 32177041)
You and I have a very different definition of "significantly".
Forget segment runs. Come fly Europe to Australia and back or something. Probably not in J though but I'll make my own J with all the empty seats. Could we make it an inflight mini-do :D |
Originally Posted by marke190
(Post 32177362)
If fares start getting cheaper, I'm in.
Probably not in J though but I'll make my own J with all the empty seats. Could we make it an inflight mini-do :D |
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