MEMBERS of the local SA travel
trade say they are losing out
because SA consumers have
access to cheaper international market
fares online, and that this practice is
affecting booking patterns.
Origin and destination (O&D)
pricing strategies were most recently
introduced by SAA but have been a
policy of a number of airlines operating
flights to and from South Africa for
some time now, including Emirates,
which has the most capacity in the
SA market.
Jonathan Gerber, director of TAG,
says: “Although it would appear that
there are far more seats available in
our market, is this really the case as
they are not always available to us?”
He explains that because airlines can
get a better fare out of other markets
that have a stronger currency, South
African agents are effectively “locked
out to a large degree initially on flights
and especially in the lower classes”.
Jonathan adds that as it gets closer
to the travel dates, if the airline hasn’t
sold the flights they are opened to the
South African market, which not only
affects the global competitiveness of
local agents but also creates a later
booking pattern.
“All that we are doing is getting
clients to book later, which flies in
the face of the old traditional airline
methodology of the later you book the
more you pay,” says Jonathan.
Wally Gaynor, md of Club Travel, says
it is in the airlines’ interest to sell
their seats in hard currency markets.
But, he adds: “Personally I would like
to switch as much traffic away from
these carriers as I could. I would love
to give more support to airlines that
do not have O&D and are consistently
supportive of the SA trade.”
Wally says he would like to see
international fares quoted in US dollars
if this would help level the playing
fields. “It’s having a major impact on
the business both online and offline.
I can’t tell you the number of calls we
get in the Flightsite call centre saying
an international site has cheaper fares.
Trying to explain to a client that they
don’t have cheaper fares, but that the
particular airline has given them better
availability is difficult.”
He adds: “We have seen on the hotel
side where global sites like hotels.
com dominate hotel booking in virtually
every market, our competitors are no
longer local but global.”
David Pegg, md of Sure Viva Travels,
says carriers have given his company
net fares that in many instances are
lower than their own website prices.
However, he says carriers such as Air
France\KLM are “competing with the
very travel agents who probably give
them a minimum of 75% of their flown
revenue generated in South Africa”.
“I don’t mind being slightly more
expensive because my clients value the
service we provide. However a R9 700
difference on the cost of an air ticket
from Paris to Cape Town and back is
not acceptable. This happened
on three occasions in the last
month. It makes you wonder
how their yield management
system works. My simple
question to AF/KL is: do you
want to partner agents in this
country or not?”
Air France did not respond to
TNW’s requests for input by the
time of going to print.
Club Travel is countering this
practice by partnering with
overseas consolidators, so
clients will see the cheapest
fare. Offline, Club Travel has
implemented a system at
its head office that allows it
to see availability and book
seats seamlessly with any of
its Globalstar partners around
the world. This system will
be rolled out to Club Travel’s
partners once it has been
tested.
However, Wally says these
solutions are not ideal as
Club Travel loses GDS income
and airline figures locally are
reduced, impacting overrides.
A number of airlines TNW
contacted for comment did
not respond however, June
Crawford, ceo of Barsa,
says: “The airlines carefully
monitor their inventory, an
essential and common
business practice, which is
based on maximising their
revenue opportunities on a
per flight basis. This practice
is simply based on business
principles and sound revenue
management. The weakness
of our currency will obviously
impact on the availability of
some flights for sale in South
Africa. It is my understanding
that all points of sale will
be included in revenue
management and in this
instance that would include
South Africa.”
