Guest Author - Yvonne Russell

The pricing of online budget airfares fluctuate, on a sometimes hour by hour basis. It's the same concept as hotel rooms. Supply and demand, togther with marketplace and business operation costs, determines pricing.

Even in the same class, whether Economy, Business or First Class, all seats are not created equal. The person sitting next to you, may have paid a different price to you. It could be pure luck. It may be her frequent flyer status with the airline, or her history with the travel agent. It could be down to travel savvy, and chasing the deals.

There is a humorous airline anecdote that poses the scenario of how a paint shop would operate, if they sold paint, in the same way that airlines sell tickets. It goes something like this. A red tin of paint costs a certain amount. The customer is deliberating. By the time the customer has made up her mind a few minutes later, the price has changed. Alternatively, the paint is no longer available.

Tomorrow there may be no tins of red paint left. Green and blue paint may be available. Some of the green paint costs a certain amount. A few tins are given away for free or at a discounted price to loyal customers. The rest is more expensive. Some of the blue paint is not available for sale, even though it is sitting on the shelf, unsold. Just a few tins of blue paint may be available between 12.00 and 1.00 p.m. for a Happy Hour half price special.

This quirky way of looking at budget airline pricing, certainly makes the point of variable airfares and a competitive market. Not only are the airlines competing against each other, but it seems the customers are pitted against each other too.

More onus is on consumers now, to get into the fray, and vie for the seats and flights they want. This is much more efficient, cost wise and time wise, for both the consumer and the airlines, than standby. However, if too many airlines have empty seats, the business model may need to be modified. My flight last week was on a run where a large proportion of seats are regularly "strapped off" to "trim" the aircraft for a balanced load. This does not inspire confidence in the viability of an airline, or at least, the longevity of the particular run and its services.

With airlines going into bankruptcy, and the cost of fuel skyrocketing, airline companies have to make tough choices. Consumers now expect cheap airfares, due largely to no frills airlines, price wars and internet bookings. The airline business, like most businesses is driven by the bottom line, and it is a highly competitive market with low margins. Any business that flies the discount flag, relies on high volume sales.

Airlines are grappling with a choice of flying with empty seats, or letting seats go more cheaply. Fuel, staffing and operational costs are weighed against publicity and credibilty issues. Let's hope a middle ground can be found, to support the needs of all parties, airlines, travel agents and consumers alike.