Understanding Airfare Flash Sales
Airfare flash sales – it’s our bread and butter at Thrifty Traveler. We want you to know about these sales ASAP since they never last long. But what is a ‘Flash‘ sale? Why do they come and go the way they do and why oh why can’t we predict them?!
Let’s step back to understand the different types of flash sales and what drives them. There are four different types of flash sales that we’ll discuss here:
- The Promotion
- The Share Recapture
- The Fare War
- The Mistake
I. The Promotion
This is your traditional fare sale. The airline needs to stimulate demand on any number of routes so they put them on sale. These sales often go along with airline sponsored advertising and/or is tied to a special event, like Black Friday, etc. If you are a loyalty member of any given carrier, you likely get emails from them highlighting the gist of the promotion. Discount levels offered aren’t usually too deep: 5% to 10% off of the standard lowest price. Promotions will typically last anywhere between 3 and 7 days because of the advertising efforts that go along with them.
2. The Share Recapture
As many of us lamentably know, there are “strongholds” where cheaper fares are hard to find. Usually these high-fare cities center on hubs where a specific airline operates the large majority of the capacity – think Minneapolis (Delta), Charlotte (American), Houston (United). Fares are maintained at higher levels because the airlines can and there is an unspoken respect of one another’s strongholds. You don’t bother us, we won’t bother you.
But because the airline industry is competitive and demand is not infinite, you will sometimes see one airline cross the line of truce to discount a competitor’s stronghold to steal some market share: Let’s say United discounts Minneapolis – Amsterdam, which needs to come down a good 20% to convince travelers to connect over Chicago or Newark in lieu of a non-stop. Delta, of course, would not be very happy about this so they reduce fares from Houston – Frankfurt to “recapture” any lost share. United, in turn, doesn’t want to give away too much share from its stronghold so cancels the Minneapolis – Amsterdam fare and Delta cancels the Houston – Frankfurt fare. This type of quick dance typically lasts no more than three days (over a weekend) or will be settled within a single business day.
3. The Fare War
Think of this as an expansive share recapture. Sometimes the counter-punch of the defending airline (Delta in the example above) is not powerful enough to dissuade the offending airline to remove its original fare. So back to our example above, United might decide to expand it’s initial offering to Detroit – Paris. Delta gets even angrier and blasts United for Newark, Washington D.C., San Francisco, Houston, Denver (all United strongholds) to all of Germany (United/Lufthansa stronghold). The prices might come down even further as well. United may either buckle because that is too much share loss to stomach and cancel its offending fares or…they may dig their heels in and expand their offering to something equally as expansive across the Delta network.
These fare wars generally do not cross geographical regions: Trans-Atlantic, Trans-Pacific, Latin American, or Domestic U.S. They can spiral out of control quickly with fare levels crossing the 50% off threshold on occasion and will last anywhere from a few hours up to 1-2 days. It is not common for fare wars to continue over a weekend, but they may resume the following Monday.
4. The Mistake
Ahhhh….the glorious mistake. When an airline pricer fat fingers the number $10 instead of $1000, and recklessly sends it to the published market. These happen less and less these days because they are EXPENSIVE for the airlines to absorb and precautions are in place to keep them from happening. But…they still do happen! It’s more common to see it from international airlines these days who may not have invested as much in procedural safeguards as the U.S. carriers.
Sadly, international airlines are also less inclined to honor the fares. As we might expect, mistake fares do not last very long because of the various safeguards in place and the fact that airlines employees read deal hunting sites like Thrifty Traveler to locate and cancel the mistakes. They usually last a couple of hours at best, but on rare occasion, the mistake might happen in the last fare filing of the day or right before the weekend giving us deal hunters a full day of glee.
With a glimpse into the types of flash sales that we see, it may be apparent why we can’t predict them. The real reason why we can’t predict them is that the demand environment in the airline industry is very dynamic with ebbs and flows that we don’t have visibility into. We can certainly apply common logic to help frame the scale of opportunity such as ‘winter has weaker demand’ so we can expect fares to be lower and we can expect airlines to be fighting harder for the demand that exists. This is why you may notice call-outs in some Thrifty Traveler communications that highlight great deals in peak travel periods, aka the summer. Part of helping you find the best deals possible is locating those diamonds in the rough that are rarer and, of course, more rewarding to snag.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer.