Prices of tickets for flights of the Latvian national airBaltic airline may decline somewhat next year, says airBaltic CEO Martin Gauss.
He explains that this year’s prices have declined somewhat, and he predicts this tendency may continue next year as well, but only if positions of different costs remain the same. If oil prices and US dollar prices increase, this prediction will not come to pass.
Gauss adds: “The market is dictated by prices, not us. Modern people pick the cheapest flight offers from the booking system. Loyalty to a specific airline is basically non-existent when it comes to economic class. The situation is much better in business class. It is all the same for other airlines. We just have to adapt to demand.”
When asked how he viewed the initiative to collect signatures in order to make sure airlines were unable to sell more tickets than there were seats in aircraft, Gauss said airBaltic was not among airlines for which this would be a big problem.
“Yes, even we tend to sell more tickets than there are seats. But the number of cases when we ask passengers to change their flight plans is insignificant. Such cases do tend to attract attention of the media and general public. We have developed a compensation mechanism. It is thanks to this mechanism that the number of complaints is very, very small. First of all, if a problematic situation appears, we ask passengers if they would be willing to voluntarily change flights in exchange for compensation. Because we mostly perform short-distance flights, there are rarely any problems with finding volunteers,” says airBaltic CEO.
At the same time, he notes that sometimes flights get overloaded and sometimes flights are cancelled because of technical reasons. “A standard compensation is paid in this case. People are usually very unhappy about such cases. I have experienced forced change of flight plans myself; this year more often than in the past. I allow that this is related to market growth – when the number of carried passengers increases, so does the number of such cases.”
Gauss notes that there can be all kinds of reasons behind flight cancellations and delays. For example, if a volcano erupts in Sicily, the flight path can be diverted closer to Italy’s center. This means an aircraft cannot reach Riga and Tallinn.
“We do what we can, but often there is no way to avoid inconveniences. There are always technical issues, poor weather and countless other reasons,” Gauss explains.
He also adds that by selling more tickets than there are seats, the airline provides flexibility for its passengers. “People can purchase tickets for business class seats, but they do not have to warn us about not showing up to flights. There is a known percentage of ticket buyers that do not show up.”
Gauss explains that there are also mathematical estimates about the possibility of passengers showing up. “Business class ticket price is rather high, and we have to refund it if passengers never fly with us. The airline has to keep those seats booked until the end of flight registration. There is no way for the airline to offer people to purchase tickets half an hour before departure. For example, some people buy two tickets – one for the morning and the other for the afternoon flight in business class, because they don’t know which they will take in the end. Pay for both, use one and get refunded for the other.”
He says that it is an advantage for travelers, but a loss for the airline, because it has to keep seats reserved for both flights.
“I think people would be rather cross if they could not refund their tickets. This does offer a great deal of flexibility,” says Gauss. (BNN/Business World Magazine)