Americans Find Fewer Seats to Europe for Sale
Not long ago a group of my friends--seven couples--sat down to plan that once-in-a-lifetime European vacation that they have been talking about for as long as I’ve known them.
They spent hours going over possible itineraries. Some thought they should start in London, circle the Continent and end up in Paris, while others preferred to go first to the farthest point, Naples, and then work back to London.
They discussed hotels and pondered the merits of self-drive versus rail or coach. Should they spend two days or three visiting World War II sites in Italy, where a couple of them had served? Should they spend an extra day in Paris, or Southern Germany, or London?
Talk about excitement. I’ve seen kids on Christmas Eve less animated.
The one thing they didn’t spend a lot of time talking about was how they were going to get across the Atlantic Ocean. When the subject was broached early in the evening, it was dismissed with a wave of several hands.
No More Group Rates
Just call an airline, any airline, and tell them we have 14 people traveling together and they’ll be falling all over themselves to give us a deal. After all, group rates are much lower than individual, right?
But it hasn’t turned out that way. Their timing couldn’t have been worse.
It’s been more than eight weeks since that first heady planning session, and the 14 have been unable to find a carrier willing to take them at group rates.
It appears as if they will have to fly separately--at individual prices--on at least three airlines over 24-hours, then link up in Rome before setting off on their dream vacation together.
Their difficulties stem from the decision of management experts in the various foreign-flag international airlines to cut back on the allocation of seats for sale in this country. Carriers have found that there’s more money to be made by peddling their wares in Europe.
European Sales Better
The condition of the U.S. dollar against the German mark, British pound, Swiss franc and other European currencies is such that an airline gets 30% or 40% better yield by selling a seat in its country than by selling it in the United States and being paid in dollars.
As a result, airlines that used to put three-quarters of their transatlantic seats on the market in this country each summer and sell the rest in their native lands have reversed the ratio.
It’s awfully hard to fault the carriers for their strategy. Somebody once asked Willie Sutton why he robbed banks. He said: “Because that’s where the money is.” The airlines are simply going “where the money is.”
European currencies are strong vis-a-vis the dollar. And so Europeans are finding the United States a more attractive vacation destination and demand for seats is high in Great Britain, West Germany, France and elsewhere on the Continent.
So in 1988 the international airlines are playing hard to get in the United States. Whereas in the past the airlines might have been willing to work to accommodate a group of 14, this year they simply don’t want the business.
Ethnic Market
Less affected by the trend are the U.S.-flag international lines, companies such as American, Pan Am, Delta, Continental and TWA. Because of the ethnic nature of the market, demand for their product in Europe is lower than it is for the “local” carriers.
But they too are, to some extent, involved in allocation switching, despite what they may say publicly.
What the foreign airlines are now doing is essentially what the U.S. carriers have done on the other side of the Atlantic for years. When the dollar was strong and demand high in the United States, our home-bred air carriers seldom showed much inclination to cater to Europeans.
Now that the shoe is on the other foot, it’s American travelers who are suffering. Travelers in the West are particularly unfortunate as a result of the maneuvering to increase yields.
For starters, there isn’t as much transatlantic air space for the West Coast as there is from the East Coast.
At the same time, areas such as California, Arizona and Nevada are tremendous magnets for European vacationers, so there is heavy pressure in Europe for the available seats to the West Coast.
Prices Higher to West
Seat prices from London, Paris, Frankfurt and other major European cities are higher to the Western U.S. than to the East. And the higher the fare, the higher the potential profit, which gives the management types in head offices a double incentive to market the product anywhere but here.
It’s not that you can’t find air transportation to Europe this summer. You can. But you may not, at this late stage, find discount fares as readily available as you thought. And you may find group seats on some carriers unavailable.
The situation, however, is a temporary one. The dollar won’t always be soft, and demand for Europe-originating transatlantic travel, in all likelihood, won’t maintain its current strength.
When that shifts, so will the yield-inspired market allocations. The carriers will once again put the majority of their product on sale in this country.
Until then you’ll just have to do what my friends have done . . . take the seats where you find them, at whatever the price.
