Airline revenue management departments are becoming “hell-bent on maximising revenue above all else”, sometimes at the expense of consumer loyalty and market share, Mark Trim, managing director of Complex Travel Group, tells Karryon.
It’s a sharp assessment of a market many travellers are already questioning. They see an airfare sale. They click. And the deal is not on the dates they want, not to the city they want, or not available in any meaningful way.
“Many see a promotion and don’t believe it truly exists,” Trim says.
So are airfare sales really sales?
“They can be, but it’s just so situational,” he says.
“People still want sales; the problem is that when most people want to go, they aren’t available.”
Trim says airlines are still promoting deals, but consumers are not always seeing the value they expect.
“Pricing and wide-scale availability of tactical promotions are not always matching consumer expectations,” he says.
“Airlines are far more strategic about sales than in the past, perhaps to the point of being overly fussy about not releasing lower-yielding inventory on flights that they are confident of selling closer to departure at higher price points.”
That can make some sales feel thin.
“They have been watered down by revenue management not releasing a wide range of dates that align with the consumers’ expectations,” Trim says.
“Certainly, some airlines release sales and you can barely tell that they matter due to a lack of discounted inventory.”
The risk, he says, is that consumers stop trusting the message.
“This does water down some sales and can lead to consumers starting to not believe in these marketing activities.”
Why one city gets the deal and another does not
Dynamic route pricing is changing what a sale looks like.
“This means that the pricing for somewhere like Dublin or Frankfurt may be thousands of dollars less than a popular port like Athens, London, or Rome,” the Complex Travel Group founder says.
“While this approach for airlines makes sense to react to real-time market demand, it has no doubt impacted the consumer’s perception of a sale.”
For travellers, the market no longer works the way it once did.
“Many are still expecting the days in the 2010s when ports were commonly rated on tactical promotions and only availability dictated the end price,” he says.
“Now there are perhaps half a dozen factors, including branded fares, that may cause fares to differ, and this level of differentiation leaves people feeling frustrated.”
Trim says the gap between sale fares has become too wide.
“We would suggest to airlines that they narrow the band of variation as it’s become a little too wide now,” he says.
“A 10-15% difference is something you can work around, but when fares vary by 30-60%, then your investment in marketing activity is often watered down.”
Are sales teaching travellers to wait?
Trim says North America shows how repeated sales can change booking behaviour.
“The North American market has had a persistent ‘on/off’ sales strategy for the last few years, given reduced travel sentiment among many travellers to the USA,” Trim says.
“Despite this perception and the noise from those who definitely don’t want to visit, the overall traveller numbers remain strong.”
Until early March, he says, the rhythm of promotions had become familiar.
“Travellers got quite used to seeing an Americas promotion every 7-10 weeks, before seeing that gap between tactical offers reduced to as short as 5-6 weeks,” Trim says.
“This did change behaviours to the point that people were waiting for another sale to drop rather than paying ‘year-round’ pricing.”
The price points that change the trip
Price still drives decisions, especially when fares cross key thresholds.
“With the right incentive, Australian travellers remain resilient and have a strong desire to travel,” Trim says.
“But when pricing exceeds certain market ceilings, sentiment can waver, and decisions may change.”
In economy cabins, the $3,000 mark matters.
“Fares over $3,000 can change where somebody will travel to. A ‘2’ in front of a price makes a huge difference.”
Business class has its own breaking points.
“Under $8,000 will be booked quickly, while fares in the $8-9k price range still get great traction,” he says.
“There is a huge price ceiling at $10,000 and again at $12,000.”
And when airlines push beyond those points, Trim says it can work against them.
“Often we see airlines not quite get this right, and revenue maximisation works against them here.”
Why Asia sales can feel scarce
“When it comes to Asian routings, we see very few sales on these routes, as they are used as gateway ports to Europe, so it’s often just working with whatever is available,” Trim tells Karryon.
Demand is also allowing airlines to hold higher fares.
“The growth in travel to destinations such as Vietnam and Japan means that some higher fares can be achieved by the airlines to assist with driving profits,” he says.
Japan is one example.
“Qantas’ recent ‘sale fares’ to Japan were over $6,000 in business class, which is some 30% higher than a few years ago when you could get sales for more like $4,000.”
And when Asia does go on sale, availability can be limited.
“When there are sales to Asia, they are often only available for pockets of dates and not during peak times and school holidays,” he says.
The airfare is not the whole story
Airline revenue is no longer just about the base fare.
“Airlines are certainly driving additional revenue opportunities with ancillary revenues and for many airlines, the loyalty programs are the main source of their profit,” Trim tells Karryon.
“Premium cabins remain extremely important to airlines, as does cargo, and filling economy cabins is more of a necessity than a huge focus on driving high yields.
“Branded fares and unbundling are being used to keep prices low at the front end, and legacy carriers continue to trend more towards the low-cost model in order to upsell and drive yield,” Trim notes.
But Trim says there is another option.
“There is room for an airline to push back on this and truly communicate a more inclusive and luxury offering,” he says.
He points to Singapore Airlines, which includes lounge access and seat selection in all of its business class fares.
“This could be more blatantly marketed, given Qatar Airways and Etihad charge for these inclusions.”
That approach would need a clear commitment.
“If you’re going to make that part of your brand positioning, it means committing to that long-term,” he says.
So has “sale” lost its meaning?
Trim does not think the word “sale” has become meaningless, but warns airlines need to be careful.
“It’s just that airlines need to avoid trying to ‘have their cake and eat it too’.”
“A strong market setter, or market leader, like Qantas, dictates the direction of the market,” Trim says.
“We see others follow across the Pacific, but in Asia and Europe, often the other airlines don’t blink.
“We’d implore airlines to get back to rewarding those consumers who think in advance and not take them for granted.”
Why travel advisors still matter
“While airlines’ bullish behaviour in this regard is not good for consumers or marketing teams trying to promote a sale, it does mean that a true airfare expert adds genuine value to travellers by navigating an increasingly fragmented and complex market,” Trim says.
But not every advisor has stayed close to air.
“Many advisors have been left behind on air,” Trim says.
“Not wanting to bother with NDC, branded fares, short TTLs, fares being pulled without notice, and a lack of help from airlines who create a mess at times.”
For those who have, the value is clear.
“Those who persist, who know their product and how to navigate such complex and dynamic market conditions, can be extremely valuable still.”
KARRYON UNPACKS: Airfare sales aren’t disappearing, but they are becoming more complex, conditional and harder for travellers to recognise as true value. For advisors, that confusion creates opportunity, as expertise now lies not just in finding a fare, but in knowing whether it is genuinely worth booking.
