More Airlines Means Lower Prices

How Airline Competition Helps Consumers

Imagine that you happen to have a ton of vacation time and are planning a trip. You want to fly somewhere cheap, but where should you go? Well, according to a new study, air routes that are served by the highest number of carriers also tend to be the cheapest. So when trying to book your vacation, it may make the most sense to fly between large airports that are served by several carriers. Here is the chart that explains how the number of airlines effects prices per mile.

A Travelers Dilemna

While this chart is great news for someone living in say New York, what does it mean for people from smaller cities? Typically we think that larger cities like New York, Chicago and Boston have high costs, but when it comes to air travel the opposite tends to be true. If you are a frequent traveler, you may actually spend much more money if you live in Burlington, Vermont than if you live in Boston. For domestic flights, small airports with few routes can be almost five times as expensive for flights from large airports! 

In theory, this would suggest that we should, as a society, build large airports or no airports at all. Rather than trying to serve all small metropolitan areas with airports, we should theoretically consolidate power into mega-airports in order to further reduce prices. The only problem with this is that it would shut many people out of the market. If for example we did shut down the airport in Burlington, Vermont, people who lived here would be stuck. The closest large airport would be nearly 5 hours away in New York City. That's no good, at least not for now.

A Transportation Solution

The issue comes down to a matter of travel efficiency. For long trips, say more than 500 miles, it makes sense to travel by plane because it saves the most time. But say you need to travel only 250 miles. The optimal trip in this case it to take a high-speed train because the time that you would save from not passing through security at an airport would make train travel faster. So in our theoretical model of small airports, Burlington should shut down it's airport and those wishing to travel a long distance should take a high-speed train to New York and then fly to their destination. 

So in reality, the issue is that there are not enough trains in America. Unless you are traveling between Boston, New York and D.C., nobody wants to travel by train because there are no trains. If however, we were willing to invest in reasonable public transportation by means of train, we could save travelers tons of money by not forcing anyone to fly out of small airports for "convenience." 

Reasons to Travel to Europe

For most of my life I have wanted to travel to Europe. My desire stems from studying maps and learning about history as a kid. I remember being fascinated by Greek and Roman history and learning about many various european cultures. For most of my life this remained a dream, but this winter I may finally have a chance to spend a few weeks abroad. Here are some reasons you (and I) should spend some time exploring Europe.

It's Cheaper than you Think: Round trip flights to Europe from the United States can be found for less than $800 if you plan far enough in advance. I am looking for tickets from Boston to London for December, during the holidays, and tickets are still less than $900, (about the cost of 9 nice sweaters). Once you arrive in Europe, it becomes extremely cheap to stay. According to Hostels.com/europe, many cities have hostels with great reviews for $5 - $10 per night! If you can stay for more than a week, the expensive flight can quickly be offset by room expenses.

Gain a New Perspective: Often people spend most of their lives in one country or even one small region of a country, New England in my case. While the area you live in my be comfortable and pleasant, other areas can offer extremely different experiences. Most people become accustomed to their own culture and way of life and can gain so much from learning the customs of people who live differently. This sense of discovery can foster an appreciation for diversity as well as of one's own cultural identity.

Travelling in a foreign country is a way to challenge your own perspective on life and gain new ideas. If you stay in one place for your whole life, you may not develop a full sense of happiness because you have nothing to compare it to. While travelling you may discover that you want to relocate to a new place or you may develop a newfound love for your home country or city.

Gain a Sense of Independence: Having the opportunity to travel, especially to a country where you are unfamiliar with the language, provides a pathway to becoming more independent. Being somewhere totally new will force you to think in ways you may never have thought and use skills that you may not have used before. Interacting with locals and making your way through a foreign land without help can make you proud and feel capable of accomplishing more than you thought possible of yourself.

Carpe Diem: If you are thinking about travelling, whether it be to Europe or elsewhere in the world, my advice is just to do it. Life only comes once and if you have an opportunity to go somewhere you have always wanted to go, just do it. I realized recently that when I am much older and look back on my life, I want to know that I did all of the things that I always wanted to do and so I am trying to live by my own advice. Sure, it may be expensive, but there are ways to save money. People tend to enjoy experiences more than their material belongings. Besides, who needs all of those sweaters anyways?

Cheapest Ways to Fly

Since it is summertime and many people are making travel plans, I thought it would be a good idea to write a post about the ways to get the best deals on flights. Sometimes doing some extra work and being flexible can help save lots of money on airfare. Here are a list of tips that can help to plan the best flight schedules.

Book Flights for Tuesday, Wednesday or Saturday

These are the days each week that have the least demand for flights. To fill flights on these days, airlines often have to make prices more attractive to travelers. Tuesday and Wednesday are expected but Saturday may be surprising. Most flights happen on Friday or Sunday; when people are taking vacations, they often wish to leave Friday and not wait until Saturday.

Shop on Tuesday

Tuesday is the day that the least people are online shopping for flights. Prices tend to rise when customers are comparing prices, even if they make no purchases. Because people tend to spend the least time shopping for tickets on Tuesdays, the prices tend to be lowest.

Shop Many Airports

Many people make the mistake of choosing a specific airport to fly out of and into. This greatly reduces the number of flights to choose from. For example, a flight out of New York City could use JFK Airport or LaGuardia. Kayak.com has a tool - add nearby airports - that allows customers to select from several different departure and arrival airports at once.

Fly From a Hub

If it is not possible to be extremely flexible, try to fly out of a major airport. Airlines operate using spoke and wheel models; many flights from small airports have layovers at large airports before rerouting to another destination. The largest hub airports tend to be located near major U.S. cities.

Fly Early or Late

The flights with the cheapest seats tend to be those that leave at the earliest times in the morning, often before the sun rises. Fewer people want to fly at this time, so flights are harder to fill. When a route offers red eye flights, they are often even cheaper.

Buy One Ticket at a Time

This can be stressful! When several people are travelling together on a flight and buy tickets in one transaction, the airline charges the the same price for each ticket. The price they charge is the most expensive ticket. Buying the same tickets separately can allow one or more of the tickets to be sold at a lower price.

These are my main tips, but the most important thing is to be diligent. But remember, travelling is supposed to be fun, so don't get too stressed out.