To buy or not to buy?

As flight prices drop, that's the flyer's question.

By MARK FELDMAN
El Al 224.88 (photo credit: Ariel Jerozolimski [file])
El Al 224.88
(photo credit: Ariel Jerozolimski [file])
He walked into the office, looking disheveled, sporting a three-day growth of stubble and mumbling that he had to speak to the manager. I invited him into my inner sanctum noticing that rarely have I seen someone so befuddled. He explained that he doesn't have a lot of money but had planned to attend his granddaughters wedding in New York late this summer. The moment he received the thrilling news of the expected event he checked all the alternatives and purchased a round trip ticket to New York on El Al for $1,470. He cracked a smile as he told me this was $400 less than if he had flown just last summer. He was certain that parting with the money seven months in advance would save him hundreds of dollars. His present demeanor came from the realization that as he perused the newspaper ads he saw that airlines had slashed their fares to unheard-of rates. What was he to do? He is not alone. Travelers who have already purchased their tickets for summer or fall flights to North America and Europe are discovering that airlines, worried about weak travel demand and sagging revenue, are cutting prices dramatically. Tempted by early bird and Election Day sales, the consumer has been trained throughout the years that when a price is reasonable, it's worth pouncing upon it. This spring has seen a reversal of this most basic tenet. Deep into a recession, with competition continuing to grow, many airlines are lowering fares to unheard of prices, simply to fill their planes. Fares have been dropping because demand for international travel has been extraordinarily weak. Business travelers, who generally pay more for their tickets, have lowered the frequency of their trips abroad. With the price of oil at a 15 month low, fuel surcharges have dropped to reasonable prices. Airlines are even beginning to return basic services that were cut. US Air proudly announces they will now serve free soft drinks and coffee on their internal U.S flights rather than charging clients as they've been accustomed to doing. Thus the informed consumer has two options. If one believes that the recession will continue and that the airlines will lower fares even more, then holding off one's purchase may be worth the gamble. However, the axiom from Wall Street, in my opinion, rings true. You can make money in a bear market, you can make money in a bull market, but pigs always get slaughtered. The moral is simple: If you're able to find an inexpensive fare for your summer or fall trip, my advice is to take advantage of it. There is a limit to how low airlines can lower their fares and I am skeptical how much lower the price of fuel will drop. Keep in mind that airfares are approximately 30% less than last summer and on several airlines, savings can exceed 50%. What, however, are your options if the prices do fall after you've purchased your tickets? First and foremost you must always demand prior to purchasing to find out what is the cancellation and change fee of the ticket. Make certain you have an exact figure and keep in mind that travel agents take a service fee on top of what an airline charges. Change fees will be incurred if you make an alteration on your ticket once you've purchased it. This could be as simple as delaying the trip by a few hours or pushing it off for several months. A cancellation fee implies that you are not making the trip at all, or certainly not on the ticket you've purchased. Canceling your existing ticket allows you the opportunity to take advantage of lower fares. Thus it is vital to make an exact determination if it is really worth buying a brand new ticket. There are a couple of catches. Tickets for flights inside the U.S are usually non-refundable though they can be changed up to one year. Very few airlines sell tickets departing from Israel that are non-refundable. There are some exceptions. The Spanish airline, Iberia, has been promoting her $299 spring fare to NYC. Unfortunately she fails to mention the ticket is non-refundable and an additional $400 must be added for the taxes and fuel surcharges. Still, $699 to the Big Apple is an excellent fare if you can find the space and are willing to take the risk. The four airlines that fly non-stop to North America, El Al, Continental, Delta and Air Canada are aggressively promoting their early summer and fall fares. Fortunately, none of their offerings is non-refundable and in the worse-case scenario you would be charged $200 if you had to cancel. Taking advantage of the myriad deals that are being promoted to Europe is also a consideration. Most of the airlines also offer tickets that can be canceled with a penalty. Two glaring exceptions are British Airways & Iberia. For their specials fares, either use the tickets or lose them - they are completely non-refundable! Moreover, names on tickets cannot be changed. If you have purchased a non-refundable ticket the only person who can use it is you or someone with the exact same name as you. Have yet to find someone who's successfully navigated that catch. So what of our bereft visitor? Happily he was informed that his existing ticket could be canceled and even after the cancellation fee that El Al charged, he ended up saving an additional $350. His beaming smile made our day as he sauntered over to the El Al office to effect the change. Mark Feldman is the CEO of Ziontours, Jerusalem. For questions and comments email him at mark.feldman@ziontours.co.il