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Old 25th Mar 2012, 00:52
  #137 (permalink)  
righthandrule
 
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If a lot of seats have been sold in blocks to travel agents then there is even less control over yield. Travel agent blocks are sold at the lowest price to make it viable to package the holiday at a profit. Say 50 seats per flight are taken at base price by a travel agent, the airline then has to sell the remaining 98 seats themselves. To capture good early bookings, a good proportion of those 98 seats will need to be sold at a low price to get any bookings at all, really only leaving 10-20 seats to collect yield on. However conversely run the risk of selling the flight all yourself as the airline, the route may be a flop and all 148 seats may have to be sold at a low price to fill the aircraft. Whilst sensible to take allocations to start off, baby needs to sell to the high yielding flight only passengers to actually make any money. Making money on holiday allocations works by moving volumes with very low yield per passenger. Baby is far too small to do this. Going down the leisure allocation route at a new base will guarantee good loads for the first season as generally a new base won't make any profit in its first year. However, anyone can fill a plane by flogging the seats to travel agents, I bet the prices sky rocket next year when they realise naff all was made on these routes this year.
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