British Airways is currently offering return fares of £139 to Larnaca and £159 to Athens under its World Offers banner.
The fares represent a saving of around £50 on published prices and are an attempt to kick-start demand for the eastern Mediterranean in the wake of the war in Kosovo.
This is just one of hundreds of tactical offers being run simultaneously by BA on routes around the world on any given day. But who co-ordinates these special offers and decides where they should be promoted?
This is the job of the sales product department, a division of UKleisure sales based at BA’s Waterside offices near Heathrow. The department’s job is to decide what will be the most effective channel for shifting seats on a particular route at a particular time of year, and then set prices that will be attractive to that market while meeting revenue targets.
Acting manager for sales product James Bell said:”Over the past three years, the department has reinvented itself to become an active part of the sales force rather than some head-office division dealing with yield management.
“There’s more to selling a seat than price and we are working closer than ever with operator and wholesaler partners to tailor-make fares for different markets.”
Seat consolidators are an important outlet for BA’s leisure division, accounting for 40%of straight seat sales. Other channels include tour operators, the groups market, student market and BA’s own last-minute brand World Offers.
“We might find we have capacity to shift on California routes for the month of August. Obviously it will be no good for the coach market as they require a long lead booking time. But it might be more suitable for students who are traditionally late bookers,” said Bell.
Before deciding on a fare the department will look at how many seats there are to sell, what the competition is doing on those particular routes and take into account global factors such as civil war or natural disaster, economic depression and major events such as the Olympics or the millennium which might affect demand.
The department of 20 is divided into geographical areas enabling individual members of staff to keep abreast of trends in a particular market, and to get to know the tour operator and consolidator partners specialising in those regions.
Bell said the trick was to know when to stop discounting prices and start looking for other reasons why a particular route is not selling.
“For example, if Seattle is not selling in November and we keep lowering the price but there are still no takers we would then go to the network department and suggest putting a smaller aircraft on that route. Or we can approach tourist boards about campaigns to build destination awareness.”
There are also times when it is not practical to compete on price – for example, on routes operated by low-cost carriers.
“If Ryanair want to offer £30 fares to Genoa then we can’t match it on price. We will let it take the business which is looking for a cheap flight and focus instead on the cruise passengers flying out to Genoa,”said Bell.
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