It has been a peculiar summer, even in that most peculiar of industries, aviation. Last February, industry leaders, led by Ryanair chief executive Michael O’Leary, were declaring it would be a summer of high demand and short supply.
He should know. O’Leary’s own order book was going to be 17 aircraft short of what he anticipated, due to unexpected delays at Boeing. Elsewhere in Europe, Airbus airlines such as Wizz, Lufthansa and EasyJet were going to be short for another reason, groundings caused by a recall of Pratt & Whitney engines. Fares were expected to soar with the temperatures. Ryanair’s share price rose, too.
This week, we enter the runway to the busiest days of the year at Irish airports, and things look very different indeed. Ryanair’s load factor is short of its own high targets. The airline has launched four flash sales that include, unusually, peak summer travel dates.
The share price has fallen. For all the talk in Ryanairland of customer being king, it is the shareholder who rules.
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Over in Aer Lingus, the pilots and airline are dusting themselves off, emerging from a scrap that terrorised passengers and cost the airline tens of millions of euro, killing off the forward bookings of the summer along the way. If Ryanair’s load factor is short of expectations, Aer Lingus’s is catastrophic. They have just had a flash sale of their own offering shoulder season prices at peak times.
In the annual cat-and-mouse game between the airlines and those who travel on them, it is the customer who wins. This has rarely happened outside the pandemic years of 2020 and 2021.
The received wisdom is that the passenger who books early gets the cheapest flight. Not this year.
Airline tickets are the original yield-managed commodity. Airlines collect data from each sale, feeding it into the system to predict future prices.
Two simple and opposing graphs reveal how airfares work. Low-cost airlines and well-managed charter flights start their fares low and finish high. Anyone who has had to rebook after missing a flight knows only too well how much the last seat on a low-cost airline can reach.
Late specials were a feature of the glory days of the tour operators. When a charter airline miscalculates, the price starts high and drops and drops until the last ticket is sold. Wily holiday makers could pick up some great deals at the last minute.
With low-cost airlines, flights that are unprofitable are dropped. EU compensation rules mean airlines must cancel a flight more than two weeks in advance if they want to avoid having to pay compensation.
That is the starting point of a whole series of new calculations which disrupt the “book early get the cheapest seat” model. The first prices loaded in the system can yield a higher price from those people who do not have any flexibility, they have to travel for a wedding, sporting or family occasion or concert. Some airlines have been known to cancel entire flights when a rugby quarter-final is announced and resell their seats at a higher rate.
Then the real game begins. Different rates are automatically inserted into the system for the cheaper midweek flights, the middle tier of Thursday, Monday and Saturday evening, and the most expensive on Fridays and Sundays.
The airline bots research what the average price for the previous year was, and how much ancillary revenue the airline can anticipate. Price can start high, drop, rise, drop again and even repeat that cycle.
These prices rise until departure time. Unless (and there is always an unless) the seats are not selling fast enough, when the fare prices inexplicably drop.
Flash sales are a sure-fire way of getting passengers on board a slow-filling flight. Pre-pandemic it was normal for Ryanair flights to average 96 per cent load factor, something virtually unheard of in an industry when the average is 82 per cent. Michael O’Leary says that price will always stimulate demand.
By Easter this year it was clear that things were going badly for the airlines. The prices that were loaded into the system last autumn were too high. Passengers held off booking their holidays during the key January and February rush period. International demand is not back to pre-pandemic levels (Ireland is closer than most).
Price can start high, drop, rise, drop again and even repeat that cycle
Ryanair was playing its own game of cat and mouse with online travel agents. Fed up with fighting with Ryanair over screen scraping – that is, agents’ use of price and flight times to create holiday packages – the online travel agencies decided not to list Ryanair at all in December. The airline’s load factor fell to 89 per cent, levels last seen in 2014. Ryanair has since signed peace treaties with eight of them, the latest being Expedia, and load factor has climbed back towards its target.
It was also forced to announce a series of flash sales, not just for May, but for June, July and, most recently, August as well.
The cheapest fares are not available to all destinations. Trunk routes – the busiest destinations- are the last place you might expect to find a bargain, but there are exceptions (see panel).
New and unfashionable routes are where the best bargains are, while even some routes that have been in place for a few years aren’t as busy as others, such as Ryanair’s route to Nimes in France.
Belfast, Cork and Shannon can be cheaper options than Dublin, by about 10 per cent. The presence of Jet2 and EasyJet in Belfast means there are three competing airlines on many sun routes. It is unusual in Dublin to have more than two airlines competing on a route. Barcelona, Copenhagen, Lisbon and Madrid are exceptions.
The arrival of two airlines on the Minneapolis route, and the fact that four airlines are competing to Toronto, makes it the transatlantic bargain destination of the summer.
Volume can keep prices down as effectively as competition. Ryanair has flooded the market to Spanish provincial cities and often competes with itself at adjoining airports.
An airline that has less presence in Ireland than the big ones can find it hard to fill seats, as Vueling found when it had to give away seats from Cork and Shannon.
It is seldom that an airline gets its sums wrong. Ryanair and Aer Lingus, for separate reasons, got them wrong in 2024. And they are not alone. A few long-haul airlines have launched with flash sales of their own.
A new problem is arriving to rain on our parade. Airlines are finding they cannot put extra flights in place because of the M50 passenger cap on Dublin Airport. Unless removed, it will drive prices back up again.
Happy travelling.
Air fare wars: where to find the bargains this summer
Popular sun spots:
Malaga and Faro are busy destinations for the Irish market and tend to be expensive in summer. However, they are two of the routes that have seen frequencies grow beyond pre-pandemic levels. There have been good deals for French destinations such as Nimes and Nice, while some airlines have reported lower booking for Paris as travellers opt to avoid the crowds.
New routes:
New and unfashionable destinations tend to be where most bargains can be found. These are some of the newly-established routes from Irish airports:
Dublin: Ankara (Pegasus), Boston (JetBlue), Catania – Sicily (Aer Lingus), Dalaman – Turkey (Aer Lingus), Denver (Aer Lingus), Halifax – Nova Scotia (WestJet), Heraklion – Crete (Aer Lingus), Las Vegas (Aer Lingus, starts October 25th), Minneapolis (Delta), Minneapolis (Aer Lingus), New York JFK (JetBlue), Olbia – Sardinia (Ryanair), Rennes (Emerald), Toronto (WestJet).
Cork: Charleroi (Ryanair), Lyons (Aer Lingus), Rhodes (Ryanair), Venice (Ryanair), Zadar – Croatia (Ryanair).
Derry: Birmingham (Ryanair), Faro (British Airways)
Belfast: from Belfast City: Alicante (EasyJet), Palma (EasyJet); from Belfast International: Antalya (Southwind), Antalya (Tui), Bodrum (Jet2), Enfidha (EasyJet), Funchal (Jet2), Larnaca (EasyJet), Larnaca (Tui), Malta (Jet2), Malta (Ryanair)
Shannon: New York JFK (Delta).
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