The travel industry has long embraced technology.  The origins of today’s reservation systems date back to the early 1960s with the practical applications becoming widespread in the decade of the 1970s.  Initially, these systems were made available only to the airlines and travel agencies. Prior to the computerization of airline reservations and ticketing, all airline tickets were handwritten with pricing set and published in gigantic airline tariff books which resembled telephone books. Fortunately for me, this was before my career began in the travel industry.

The airline reservation system, known today as the Global Distribution System (GDS), certainly streamlined the process of ticketing. It also enabled the airlines to add a complexity to airfares that was previously unattainable. Prices can change instantly based on available seats of an individual flight.

It is not unusual to see an airline publish 18 or 20 different fares for seats on the same aircraft. Each fare has a varying degree of restrictions with the most restrictive seat selling for, let’s say, $168 roundtrip all the way up to $862 for a completely unrestricted seat. First class seats could start at $876 and go up to $3,730!

What is the difference between a restricted seat and a nonrestricted seat? The least expensive fare (restricted) has the most rules. To purchase this airfare, it might have a prepurchase requirement of more than two weeks prior to departure, less desirable flying times (very early, very late or overnight), minimum stay requirements, no refunds on ticket, no changes allowed without substantial penalties, no upgrades, no standby for a different flight, valid on certain days of the week only and sometimes no mileage accrual in the airline frequent flyer program. The unrestricted ticket, the most expensive, allows you to do all the things a restricted ticket prohibits. And to further complicate things, there are a limited number of the restricted seats for sale on an individual flight.

Popular destinations, like Florida from Michigan in the winter, may only have a few restricted seats for sale. Once sold out, you move down the restriction ladder and up in the cost of the seat. The airlines are one of the few industries where the more you buy the more you pay. If you purchase 50 seats on an airplane for a group, you pay a “blended” fare between the least expensive and most expensive. That allows the airline to keep a few seats for sale at the most restricted level.

Think of it like going to the grocery store to buy some fresh tomatoes. The produce manager puts 20 tomatoes in each of five bins. Each bin has a different price. Now, each tomato came from the same bushel basket, the same farm and all are equally fresh, but the first bin is the one that they advertise to bring you in to buy. When those are gone, sorry we are sold out at that price, but we do have some others you can choose from.

Technology is like having the produce manager (in the airline world they are called revenue managers) standing there monitoring how tomato sales are going. If tomato sales are going strong, he will take some of the less expensive tomatoes and move them to the more expensive bin.  If you want to buy 20 tomatoes for canning purposes, he will only allow you to take four tomatoes from each bin even though there are still less expensive ones available. Maybe the produce manager will ask you if you are going to cook the tomatoes tonight, otherwise you cannot buy the cheapest ones; it is a rule you must cook those tonight or you have to buy from another bin.

Sounds ridiculous but that is how the airlines develop their pricing. Why not put them all in one big bin, price them so the store makes a reasonable profit and be like the rest of the world? Nah, that would be too easy! If the airlines ran the produce department, it would go something like this: “ I know,” says the airline executive, “let’s charge them to use the shopping carts! And we can also charge a fee for those grocery bags.”

So now you know… blame it all on technology.

		Michael Jackman is president of International Tours, a full-service travel agency, and president of GalaxSea Cruises, specializing in cruise vacations. Both offices are located in Okemos. Jackman has received many awards and designations, and has been in business since 1984.