Why airline tickets are the cheapest on airline websites ? Differences reach 20-30% of the price

This is the question business travelers/travel managers often ask, what is the answer and will this trend continue to strengthen ? How to organize our business travel to have access to the cheapest deals? Which agents are offering prices similar to those on airline websites.

Airlines struggle with distribution costs, own sales is the cheapest

Traditional airlines have no longer been a high-margin business for years. Their managers are still looking for additional savings with reverence. The easiest of these is to try to boost sales through the airlines’ own sites.

After all, the difference in sales costs for the airlines is substantial. Sales via agents used booking systems like m.in Amadeus or Sabre can be even 100 PLN(and more) more expensive than that generated by its own site. That’s the (big) stakes at stake.

NDC new standard to change the way airline tickets are distributed

For several years, work has been carried out on a new standard of distribution of the so-called. NDC. It is supposed to be a kind of alternative to traditional booking systems. NDC brings great challenges first of all the way of booking as well as handling situations of irregularity still leave much to be desired. Agents are accustomed to booking through traditional GDSs, which they find more friendly. However, it seems that there is no going down the road to a new standard. Other major airlines like Finnair are joining NDC in differentiating their fare offerings.

Lufthansa and Air France/KLM – in these cases the price differences are the greatest

Two major airline groups ie. Lufthansa and AF/KL – were the first to change their distribution model very significantly. This results in prices on their sites as much as 20-30% lower for the cheapest European fares. With long-haul flights, the difference in % is lower, however, often reaches 200 or more zlotys per ticket. In addition, on the airline’s website we do not pay for issuing tickets, which exacerbates the differences vs. agency service by another several dozen zlotys.

LOT still delayed in its work benefit agents

Luckily for business travel agents, our national carrier is well behind in the work on the NDC. LOT is also being blocked by agreements with global booking systems of the so-called “global airline”. Full Content Agreement. They prohibit LOT from offering lower prices on its own site. Despite the fact that NDC generates very significant savings, it is so far unheard of that LOT plans to aggressively implement it.

The national carrier, however, uses other rather subtle incentives to buy on its own site. First of all, the removal of the booking fee. We may also be tempted to earn additional points under the LOT for Business program.

It is worth making sure that the agent serving us offers the line’s NDC solution

Agents have been put, so to speak, against the wall , to make their offer competitive they must adapt to the requirements of the lines. The biggest of them, i.e. m.In. eTravel as well as eSKY are successfully operating Lufthansa Group technologies . Why Not Travel is also working on this solution. A number of smaller agents also have access to this technology, especially those specializing in group sales. The situation is different with the KLM/AF offer. It’s harder to find partners with the same price offer as www. Agents, however, should be able to sell the cheaper offer of the French-Dutch group within their GDS ( Amadeus) resources.

Finnair will also soon introduce its proprietary solutions is a very important airline in the segment of business travel to Asia. If we fly these destinations we should check if our agent will be an authorized partner of NDC Finnair.

In Western Europe, aggregators offering integrated NDC of all players in one tool have already appeared. Probably Polish agents will soon be able to use such a solution as well.

How to take advantage of the lower prices offered by the airlines

From the perspective of a small and medium-sized company, it seems indeed difficult to combine two contradictory tendencies. On the one hand we have visibly lower prices on the line’s website, on the other hand we have our agent who also offers us certain benefits. The ideal situation would be when the agent serving us has access to a cheaper offer, unfortunately, this is not a common standard today.

Another solution can be a hybrid approach ie. Purchase Lufthansa and AF/KL tickets via the lines’ websites and the rest of the tickets via the agent. Of course, such a puzzle makes sense when ticket volumes are significant. The mentioned 100-200 PLN savings multiplied by the number of tickets allows you to easily calculate the potential savings.

Note that it is worth remembering that we can also generate price differences when traveling in groups. E.g. If we plan such a trip with the Lufthansa group. Be sure that the agent books it through the internal system of the German carrier.