Let’s face it. Earning points is a whole lot easier than redeeming them for the flights you want. There are countless hurdles to jump over and things to consider that can make you question why you even started collecting points in the first place.
If you don’t know what you are doing, you can easily step on a landmine like flying with an airline that charges Fuel Surcharge (YQ). Luckily there are resources out there to help you avoid those traps including my article,The Comprehensive List of All Star Alliance Partners and Their Fuel/Carrier Surcharges.
If you don’t want to jump into the rabbit hole, you could always use a booking service to navigate those obstacles for you like Awarding Canada or AwardMagic, both very reputable services that do an excellent job at finding you your dream redemption while keeping your award taxes and fees low.
But if you want to learn how to make these bookings for yourself, you need to learn some rules of thumb that will help you understand how to search for award availability.
Look Far Out or Look Close-In?
Many people believe that you need to book far in advance to find availability for your flight and that can certainly be true, especially if you intend on travelling to popular destinations during high season. If you are fairly inflexible when it comes to dates of travel and your routing, it would be best to look far in advance but if you have some flexibility and are maybe a little bit brave, you can typically find availability close-in.
Obviously, a single guy/girl that is in university has a lot more flexibility to travel at the drop of a hat versus a family of 4 that have school age kids at home so you will have to determine where you fall on that spectrum.
What Is Close-In Availability
Close-in is a term that doesn’t have a set definition but it usually means that your flight is within the next 2 weeks, sometimes referred to at T-14. Close-in for some airlines might mean that the flight is within the next month (T-30) so some people may have a different definition than you. Suffice it to say, close-in means that you are booking closer to the date of travel.
Now most people that have been in the Travel Hacking community know that many airlines release seats close-in but those that are new to the game believe the misnomer that award seats get snapped up far in advance, leaving no further inventory.
That’s not necessarily the case.
Why Does Close-In Availability Exist?
Well it really boils down to two factors, maximizing revenues for the airlines and the liability that the airline holds when it issues points.
Airlines are in the business of making money so that’s why you often don’t see award availability outside of the set number of seats they are obligated to issue (this varies between airlines). What an airline is more inclined to do is to try to sell revenue tickets right up until close to the date of travel because it means that the have actual revenue to add to their balance sheets. There are many factors at play that influence whether or not airlines issue close-in availability but the biggest one is the type of travel on the route.
If the route is a business route, like Calgary to Houston, there is less likelihood that award seats open up close-in because business travellers are more likely to travel last minute to make an important meeting. However, if the route is something like Toronto to Orlando, it’s a pretty good bet that your plane is full of leisure travellers. People that travel on vacation tend to book far in advance during seat sales so it is highly unlikely that they would book close-in especially because seats tend to get more expensive closer to the date of travel.
So if you are operating a leisure route, why not open up the seats to award bookings?
Points as a Liability
Most people don’t think about this but when an airline issues points, they are actually issuing something in exchange for the promise to pay the bearer later. To take it to a simple concept, I’ll give you an example from my childhood.
When I was a kid, Dairy Queen used to sell meal deals that gave you a burger, fries, a drink AND a token for a sundae. As a kid, I LOVED this because I knew that when I finished my meal, I had a token that I could cash for some delicious ice cream. Now that token was made of plastic, looked pretty ordinary and probably cost 2¢ to manufacturer but it wasn’t the actual value of the plastic that was important, it was that I could turn that piece of plastic into an ice cream sundae.
Now just because the token wasn’t worth anything outside of Dairy Queen doesn’t mean that Dairy Queen didn’t owe me that sundae. It’s the same thing with loyalty programs but at a much larger scale.
Because airlines hand out these points and because they hand out so many, the value of those points actually have a negative effect on their balance sheets. If you want more details of how this works, you can read the short post about it here. Long story short, the airlines have a liability and an obligation to their shareholders to limit this liability.
This is why you now see new and interesting ways for airlines to separate you from your points, such as an auction to fly to New York to attend the US Open Finals or a cooking class with Mario Batali for millions of points. These experience are a way for the points issuer to remove a large liability off their books in a short period of time.
Coming back to the close-in availability discussion, it makes more sense for an airline to issue award seats close-in, especially if they are fairly certain they can’t sell the ticket as a revenue ticket.
Think of it in terms of a ticket scalper. Scalpers have tickets for sale for an event and as they get closer to event time, the value of that ticket diminishes to a point where they would rather sell that ticket for pennies on the dollar than to eat the full cost of the ticket. The same can be said for the airline. The plane is going to take off whether or not the seats are full. You might as well get some liability off your books than to let it fly empty.
To Be Continued…
Now that you know why airlines have close-in availability, I want to give you some rules of thumb on what different airlines do but because this post is getting a bit long, I will provide that information in tomorrow’s post.
As always, if you have any questions about this post, feel free to leave a comment and I’ll do my best to address it.