Important Information You Should Know
Air travel often becomes increasingly complicated when traveling with large groups of people. At MCI, we are committed to finding the best travel rates for every member of your group, and we hope that this informative guide may help you understand the process of prices and booking.
Fares are subject to availability and availability is subject to change (sometimes drastically) on a daily basis. Seats that are being sold today at a given fare level can double the next day because the airlines have automated this process in order to maximize their operational yield.
Although we can lock in base fares for our clients (with monetary deposits or via our own Letters of Credit) we cannot guarantee the final air cost to customers because these fluctuate based upon the cost of fuel, airport security, and federal and local air transportation fees. These fees affect the overall taxes charged to air travelers.
Costs of fuel & taxes
Fuel surcharges have been part of the international airfare landscape since 2005. When fuel prices escalated faster than airlines’ ability to absorb these increases into new fare structures, separate fuel surcharges were added to make up the deficit. In 2005, an “average” fuel surcharge for an international flight was around $80/ticket. In 2006, this already escalated to around $250/ticket. From 2007 to present, we have observed steady increases. Currently, airline related taxes and fuel surcharges on international flights can range from $450 – $650 per ticket, depending on the airline and routing. On domestic flights, airline taxes and fuel surcharges can range from $30 – $125 per ticket.
All major airlines hedge their fuel costs by buying forward contracts, locking in fuel rates for a period of several months. Unfortunately, when fuel prices rise airlines are usually quick to raise fuel surcharges; when fuel prices go down, they are not as quick to react, partially due to their long-term fuel contracts.
MCI’s contracts with airlines are based on base net fares, and these base fares are guaranteed once a deposit has been made to the airlines. Fuel surcharges and taxes are separate, fluctuate with fuel prices and the value of the US dollar and are guaranteed only once an airline ticket has been issued. Many times Directors are interested in “locking in” fuel and tax levies. This is impossible to do until ticketing is accomplished. MCI normally issues group tickets after final payment has been received 45 – 30 days prior to departure, or earlier if requested and final payment has been made.
Port of Entry Gateways
“Ports of Entry” are main gateways where international flights can land. These gateways (AKA hubs) have customs agents on staff to clear passengers arriving into the United States. International flights cannot land at airports that are not ports of entry. The key ports in the U.S. are Atlanta (ATL), Baltimore (BWI), Boston (BOS), Charlotte (CLT), Chicago (ORD), Dallas/Ft. Worth (DFW), Denver (DEN), Detroit (DTW), Houston (IAH), Los Angeles (LAX), Miami (MIA), Minneapolis (MSP), New York (JFK/LGA/EWR), Orlando (MCO), Philadelphia (PHL), Phoenix (PHX),Portland (PDX), San Francisco (SFO), Seattle (SEA), Washington, D.C. (IAD).
Many groups originate in “offline cities” where they have a regional airport that serves their needs. These “non-port of entry airports” are in many instances large enough to operate larger aircraft but the major American domestic carriers including UA/DL/CO/US, etc. have decided to strike strategic alliances with regional feed airlines that operate smaller aircraft in order to yield higher passenger loads with greater frequency in these smaller markets. When a larger group chooses to originate locally and is not a port of entry gateway, they will likely be split into various smaller groups for transport into the hub.
The type of aircraft in use on these routes i.e. CR7, CR9, DH (various) limit groups (at lower group rate fares) to 25-30 passengers per flight. These smaller aircraft also make it difficult for instrumental ensembles to transport large pieces of musical equipment.
Groups within realistic motor-coach transport of a gateway may be wise in considering this option, although it might not in all cases, be less expensive from an airfare perspective. Sometimes offline cities have marginally lower fare levels (i.e. $25.00 to $40.00 pp) and small amounts of married segments for sale. It is important to remember that these published fares exist for the use of individual passenger traffic, and not group traffic. Whether or not low fares exist for our group passengers is a matter of seat availability at the time of the space search. In many instances, we fly groups into hubs in more time than it would take for them to board a motor-coach and transfer to a main hub, thus avoiding splits and additional security hassles.
Tips for Keeping Air within Budget
MCI strives to offer realistic base air estimates to groups in proposals but due to the dynamic nature of airline costs, a prediction that is accurate today can change tomorrow. The sooner a group locks in its air with a $100.00 (or more depending on the airline) per person air deposit, the more assured they are of successfully securing in-budget air.
Groups interested in keeping costs low would be wise to consider the following:
- Traveling internationally on weekends often involves weekend surcharges for travel on Friday, Saturday or Sunday. Avoiding these days could save $25.00 – $50.00 per person that can be better utilized elsewhere.
- Groups hoping to travel on a lower budget should always avoid travel around holidays. Airlines frequently raise fares when demand is heavy and demand is always heavy when potential customers have paid time off from work.
- Seasonality for group travel now includes school break periods in the high season vs. shoulder where they were set in the “good old days.”
- Traveling domestically sometimes requires staying a Saturday night in order to secure the lower fare levels.
- On transcontinental domestic flights, red-eye options sometimes can provide substantial savings and get your groups to their destinations with more time to spend sightseeing prior to their hotel check in. (Groups that arrive earlier are normally restricted from checking into their hotel earlier due to housekeeping issues at hotel properties.)
- The sooner a group provides sufficient funds to cover air deposits, the more scheduling options they will likely have available to them.
- After contract acceptance, changes to dates or itineraries often incur additional cost and are best avoided whenever possible.
- Inflating group numbers in order to reduce land costs can increase air costs and negate savings depending upon the market and space availability. Market driven pricing allows airlines to change fare levels automatically with a key stroke if demand is high.
Groups who are adamant about traveling on fixed dates without flexibility will likely be paying a higher fare for that privilege. In essence, each group decides to buy either price or schedule and should be counseled early on to consider whether they are more interested in price or schedule, because it is likely that both may not be simultaneously available.
Flight Irregularities and the Value of Additional Travel Insurance
There was a time in this industry when airlines worked together to move passengers who were affected by aircraft mechanical delays/cancellations and weather issues to their final destinations. Although those safeguards are still in place, the reality of the situation is that airlines are flying at higher utilization ratios than ever before, and sometimes passengers can be stranded en-route for periods of time at their own expense, because the other airlines are booked to capacity. It is important to understand that airlines, by law, are not responsible to compensate passengers for circumstances outside of their control and unfortunately, mechanical failures fall under that broad category. Being delayed is much better than flying across the North Atlantic in a broken airplane, and that is the basis for the legality issue involved. Groups and individual passengers wishing to safeguard their financial interests would be wise to consider additional travel protection, especially if they are unable to “self-insure” for unexpected costs.