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How does full fare / fully refundable legacy carrier flying work in the real world?

How does full fare / fully refundable legacy carrier flying work in the real world?

Old Jul 27, 17, 9:43 am
  #1  
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How does full fare / fully refundable legacy carrier flying work in the real world?

Please let me know if this is best posted in a different subforum.

How does full fare / fully refundable legacy carrier flying work in the real world for people who fly fully refundable regularly?

For example, I read a lot about companies getting huge discounts on full fare flying, but it's all very vague. How big are the discounts? Do you have to be spending millions to get the highest discounts or can smaller companies get good discounts if they commit to exclusivity? Does the dollars spent per passenger have any bearing versus just the total company spend?

I have also read the publicly available information and some FlyerTalk threads about the current American AAirpass program. People talk about 10-15% discounts. Could they possibly be higher discounts if you have a higher commitment or agree to exclusivity or something? Could they have other benefits like ability to book lower fare classes with your AAirpass credits and discount?

I am also curious as to how Y fares are justified in almost any case, even with say a 15% discount that people on this forum have mentioned with regards to AAirpass. I just checked on the AA booking site and Y fares ORD>LAS were $2,400 one way. Even at 15% off, in my experience you can buy tickets for much cheaper than that even the day before your flight. I am getting the clear impression based on reading things online that there are travelers that just ALWAYS book Y fares even if they are booking several days ahead, but the numbers aren't adding up. If you're only getting a 15% discount on those Y fares you might as well buy the cheapest fare you can find and take your chances with change fees. Hell with elite status, even with a discount fare don't you get free same day guaranteed flight changes?

I am missing part of this picture because the numbers just aren't adding up. You would have to be getting 60%-70% discounts for Y fare to make sense in most cases even for a regular last minute traveller. The Y fares are so high that if you are 2+ people it might be cheaper to charter a private jet for last minute travel. ORD>LAS you probably would need 6-8 travelers and chartering would be cheaper versus that published Y.

Now the H fare ORD>LAS was "only" $1,100 one way but at least through AAirpass, you're only allowed to book that fare 7+ days in advance. The H fare seems to make slightly more sense but people don't talk about flying H, they talk about flying Y.

Another question I have regarding flying full fare in practice regards the refundability of the tickets: since they are 100% refundable without any fees, is there any other mechanism that prevents people from just booking a seat in every single flight that they have the slightest interest in possibly traveling? For example say I had an AAirpass agreement and wanted to book H 7 days in advance to save money but I wasn't sure exactly which dates or times. What stops me from just booking every single flight available over the course of several days to make sure that I have a seat reserved on each one?
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Old Jul 27, 17, 12:56 pm
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I think you may be missing the big picture a bit. Big companies negotiate special deals with airlines that give them certain rights and privileges. As a single traveler, unless you're spending a huge amount of money, these arrangements will be neither visible nor available to you.

Completely flexible tickets are the most expensive out there, and for some people they make sense. For most they don't because over time it's cheaper to buy and lose non refundable tickets than to buy the most expensive out there.
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Old Jul 27, 17, 3:06 pm
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Thanks for the info.

Do you have any more interesting facts on any of my questions? Who are the people that get AAirpass? These people that DO fly full fare regularly, do they book as I hypothesized, maybe booking a seat on every single flight over a whole day so that they can just walk on any one?

To explain some of my logic:

It's not so crazy to think that legacy carriers might want to give big discounts to certain individual passengers or small businesses. I had a couple theorized justifications.

For a person who flies a lot of expensive tickets, maybe the legacy would want to compete better against the likes of Southwest, JetBlue, and Spirit which are known for having much lower fully refundable prices.

Additionally, imagine a single person flies $100,000 worth of fully refundable flights each year, and an enterprise company with 1,000 employees that spends $1,000,000 per year on fully refundable fares. Yes the enterprise company is spending 10x as much total, but since its a much lower amount per person, it's more likely that the enterprise would be using those full fare tickets very strategically- only buying them for the highest demanded flights in the rarest circumstances where their employees had zero advance warning of required travel. In contrast, the individual spending $100k/yr on fully refundable would be a person flying nearly every week and flying fully refundable each time, which would probably include less-highly-demanded flights. The airline might be willing to give the individual a big discount based on assuming that with such a high volume of refundable flying, it is unlikely that he is actually flying on very highly demanded flights every single time.


Originally Posted by LondonElite View Post
I think you may be missing the big picture a bit. Big companies negotiate special deals with airlines that give them certain rights and privileges. As a single traveler, unless you're spending a huge amount of money, these arrangements will be neither visible nor available to you.

Completely flexible tickets are the most expensive out there, and for some people they make sense. For most they don't because over time it's cheaper to buy and lose non refundable tickets than to buy the most expensive out there.
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Old Jul 27, 17, 3:15 pm
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Work for a Fortune 100 company that I'm sure spends many millions a year on travel. Our discounts seem to vary, but we do seem to have significantly higher discounts on refundable tickets than on non-refundable but only on international flights which lines up with our corporate policy of non-refundable for all domestic flights, refundable for all international.

Last edited by Duke787; Jul 27, 17 at 3:39 pm
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Old Jul 27, 17, 3:32 pm
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The terms of corporate discounts are confidential and their disclosure may, at a carrier's discretion result in their revocation.

The percentage discount off full F/J/Y may be the most common number, but there are many other aspects. These include fee free changes on certain discounted fares and routes, cancellation credits which may be transferred within the company, treating discounted fares as full Y for various priorities, granting of GS, 1K and other status, upgrade certs for distribution by the company, and the like. There are also discounts by route. An example is the AA Shuttle where it is common to see fares in the $700-800 and discounted tickets sold as full Y for $100-200.

The large discounts and other features are for companies spending in the $10 Millions.
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Old Jul 28, 17, 10:02 am
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I once worked for a company that had IBM as a client. IBM let us use their corporate discount. We just had to book through their agency (American Express, IIRC). Discounts were usually around 50% on most domestic U.S. fares, less for overseas flights.

Then they tightened the rules. We could only use their discount when we traveled for IBM work. Since our IBM work didn't require much travel, the fun part of the game was over.

Discount or no, I never* booked refundable fares for that feature. (I sometimes booked fares that happened to be refundable, but not because of that.) The money I saved for my company by buying discount tickets was many times greater than the cost of all the non-refundable tickets I didn't use. Granted, some people's travel patterns are less predictable than mine were, but I think that's true for most people if they do the math. Sadly, some corporate bean-counters get way more upset at having to reimburse a ticket that wasn't used than they do at paying $2,000 for a flight that should have cost $600.

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*One exception: I needed a ticket on that day to get into a Qantas lounge as part of an OzFest some years back. Bought the cheapest refundable SYD-MEL-SYD, went to the lounge, and got kicked out along with a lot of other FlyerTalkers. Phoned Qantas, canceled the ticket, got my money back. Cost me a dollar or two because of currency fluctuations over the few hours that I held it. Could have made a dollar or two just as easily.
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Old Jul 28, 17, 11:50 am
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Originally Posted by tuna_hp View Post
Thanks for the info.

Do you have any more interesting facts on any of my questions? Who are the people that get AAirpass? These people that DO fly full fare regularly, do they book as I hypothesized, maybe booking a seat on every single flight over a whole day so that they can just walk on any one?

To explain some of my logic:

It's not so crazy to think that legacy carriers might want to give big discounts to certain individual passengers or small businesses. I had a couple theorized justifications.

For a person who flies a lot of expensive tickets, maybe the legacy would want to compete better against the likes of Southwest, JetBlue, and Spirit which are known for having much lower fully refundable prices.

Additionally, imagine a single person flies $100,000 worth of fully refundable flights each year, and an enterprise company with 1,000 employees that spends $1,000,000 per year on fully refundable fares. Yes the enterprise company is spending 10x as much total, but since its a much lower amount per person, it's more likely that the enterprise would be using those full fare tickets very strategically- only buying them for the highest demanded flights in the rarest circumstances where their employees had zero advance warning of required travel. In contrast, the individual spending $100k/yr on fully refundable would be a person flying nearly every week and flying fully refundable each time, which would probably include less-highly-demanded flights. The airline might be willing to give the individual a big discount based on assuming that with such a high volume of refundable flying, it is unlikely that he is actually flying on very highly demanded flights every single time.
I'm not sure what point you are trying to make. Unless you are proving an airline with upwards of about $5m, you are a nobody. A lot of people show up on FT arguing that airline X should really value their business because they buy six long haul business class tickets a year that cost them $30,000. That may be a lot of money to a single person but it doesn't even register with the airline.

Several years ago I was head of the local division of a big company. We bought only full-fare business class tickets, short or long haul. I had a flight budget for our relatively small team of just under $1m. I thought I'd be clever and do a deal with BA and a few other airlines. I asked a friend of mine who is a senior pilot for the best commercial contact point. When I spoke with him he very politely but firmly that, although my business was really valued, we didn't hit the radar screen at all, and there was nothing he was interested in doing. This was a period where I, for example, was flying to the US 15 times a year on fully-flex business class tickets and short haul around Europe several times a week.
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Old Jul 28, 17, 2:40 pm
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Originally Posted by Efrem View Post
Sadly, some corporate bean-counters get way more upset at having to reimburse a ticket that wasn't used than they do at paying $2,000 for a flight that should have cost $600.
Nowadays, every introductory management textbook I'm aware of demonstrates that is flawed thinking. (The discussion in the texts usually centers around the concept of economic vs. accounting profits/costs).

Besides, there are also some corporate "bean-counters" which don't let you book flex. As they are aware of possible conflicts of interest (employees want flex tickets for personal reasons--mainly earning redeemable or status-qualifying miles--, not because the flex ticket makes the most sense for the business' bottom line).

The are many considerations here... Maybe some in those administrative departments deserve the derogatory "bean counter", but the term surely seems over-used on FT.

Last edited by fppmongo; Jul 28, 17 at 2:48 pm
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Old Jul 31, 17, 12:04 am
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Old Jul 31, 17, 2:38 pm
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I fly government YCA/-CA fares which are fully refundable and flexible. Cost is a bit all over the place but generally above market rates for when you have to notify and book travel.

For instance, I flew round trip NA/Europe in late June. Regs at the agency mandate travel notification and paperwork to be in around April so that's around 2-months advanced notice. Since GSA city-pair is priced only in fixed cost one way segments, the round trip priced as 2x one ways at around $600 each way. I think at the time, a discount economy ticket could have been bought for about $700-800 RT. So it's a premium of 70% based on market prices at the time that the travel details were nailed down.

However, on the day I was to make the return trip I came down with a fever. I called the gov travel agency on a Sunday afternoon 2hrs before the flight was to take off and told them I couldn't make it. They immediately canceled the ticket and offered me the same flight on any other day as long a seat in economy was open. I was booked on a flight out 3 days later in 5min, no fuss no problems. A last minute one way would have cost well over $2000 at that point.

As for whether people book multiple flights, I've never heard of that happening. While it is possible that on popular routes you may not get a seat on standby I think usually pax on fully refundable/flexible tickets have very high priority on lists. Also the GSA bids mandate last seat availability so as long as the airline is willing to sell a seat to anyone anywhere, the travel agent will be able to buy it.

I'm not too sure about other large corporations and their travel arrangements. But I imagine that the GSA probably gets a lot more favorable terms than even many large companies purely because of the federal bargaining power and revenue guarantees. But on the other hand, no business class for the vast majority of government travelers.
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Old Aug 2, 17, 10:04 am
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Couple of examples:

1) Certain clients insist on fully refundable tickets, so that if the planned trip doesn't happen they don't pay anything. In their strange round about way they hedge that the $2000 full Y ticket will be less expensive than 3-4 non refundable tickets if they have to reschedule several times.

2) I've known people I work with booked on several flights on several airlines on a single day on fully refundable fares - the reason? Weather. When someone absolutely positively has to be somewhere, it is a strategy that can work provided the entire airport doesn't close.
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Old Aug 2, 17, 1:16 pm
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Originally Posted by emma69 View Post
Couple of examples:

1) Certain clients insist on fully refundable tickets, so that if the planned trip doesn't happen they don't pay anything. In their strange round about way they hedge that the $2000 full Y ticket will be less expensive than 3-4 non refundable tickets if they have to reschedule several times.
Nothing strange or roundabout about that strategy. Many corporations have flexible travel policies that accommodate discounted flying when feasible. Many corporations that insist on full Y either have frequent enough plan changes to justify this from an overall perspective or frequently fly at the last minute.

Sometimes it could even be a combination of accounting rules and other contractual obligations that mandate certain fare buckets. I can see airlines insisting on contracts that require certain fare buckets and companies that require all employee travel to be on the company contract/account. Don't underestimate how much of a pain it is from an accounting perspective to arrange for employee reimbursement for out of pocket expenses. Some companies just don't like that.
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Old Aug 5, 17, 7:58 pm
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My company is a government contractor, and our rules (I believe based on government rules since they are government contracts) are completely insane, and make traveling an incredible PITA.

What amazes me is that the airlines must be making a killing on change fees and baggage fees in order to more than compensate for the actual ticket sale losses, and the brand image losses to WN, as well as the dwell time losses to forcing more bagging into carry-on that could be checked. On a recent flight, I would have booked DL for a direct flight to DTW, but ended up booking WN with a connection, as we weren't sure if we were going to have to change something, and end up throwing out $800 worth of tickets.

I suppose you could argue that the free market isn't working, since in theory, the legacies should all offer refundable tickets on everything and 2 free checked bags, on the other hand, you could argue that the free market is working great, as WN keeps getting bigger and bigger and is now the largest domestic carrier in the US by just using some good business practices that are now common-sense in the industry, even though most other airlines haven't gotten the message yet.
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Old Aug 8, 17, 12:52 pm
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I find it difficult to believe that there is any company that requires travelers to purchase 'full Y' tickets, I find it quite believable that there are companies that may require 'refundable' tickets.
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Old Aug 9, 17, 1:35 am
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Originally Posted by BiggAW View Post
My company is a government contractor, and our rules (I believe based on government rules since they are government contracts) are completely insane, and make traveling an incredible PITA.

What amazes me is that the airlines must be making a killing on change fees and baggage fees in order to more than compensate for the actual ticket sale losses, and the brand image losses to WN, as well as the dwell time losses to forcing more bagging into carry-on that could be checked. On a recent flight, I would have booked DL for a direct flight to DTW, but ended up booking WN with a connection, as we weren't sure if we were going to have to change something, and end up throwing out $800 worth of tickets.
I also work for a gov't contractor and work with many other companies that work mostly on gov't contracts and we all seem to have fairly different travel rules. We buy primarily non-refundable (but changeable for a fee, so no BE) tickets. We used to be all fully refundable, but they finally did the math and realized it's cheaper to pay change fees, especially since employees who fly the most also get status and have reduced or no change fee. I rarely am able to book more than a week out, and rarely fly the itinerary as originally booked - one end or the other gets changed. For transcons I take non-stops whenever possible (which is almost always) - it's not worth the extra time plus risk of a misconnect to save a change fee or $50 on a fare. In rare cases when I knew the schedule was likely to have multiple changes I've noted that and recommended that they book refundable and it's been done without a problem. I read the thread about "what stupid things does your company do to save a few pennies" and mine actually does very few of them, so I don't complain much about our travel.

Other companies I work with have policies that they make you fly back for the weekend, even if you're going to be back on monday and it's a transcon. That seems fine on regional flights, but I'd just say no for transcons- it kills a couple days traveling and just leaves you tired from the travel and time zone changes.
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