20 Aug (Reuters) – Canadians were warned last week after prices for commercial flights out of Yellowknife rose 10 times higher than usual amid wildfires raging and residents being ordered to evacuate. took to social media to complain about the airline.
Airlines such as Air Canada (AC.TO) have pledged to cap rates on Yellowknife flights as the approaching massive fires have forced most of the approximately 20,000 residents to evacuate. But that could take time, analysts said, because airlines would have to manually override automated systems that raise fares when demand increases.
Now let’s see how airlines are coping with surges in demand on certain routes.
Disaster versus high demand
Airlines set price ranges for airline tickets based on factors such as timing of purchase and demand. It then assigns seats to each fare, explains Chris Amenechi, founder of SeatCash, a startup that offers subscribers a product that predicts future airline ticket prices.
A spike in demand can cause lower-priced fares to sell out and move to higher-priced fares.
“The system doesn’t know it’s a disaster. When a disaster strikes, companies have to make the decision to disable the system,” said Ameneti, a former commercial airline executive.
“In a place like Yellowknife, there are[limited]flights, but if all the flights are full, you can imagine how expensive it would be because no one has an empty seat.”
He said that in some cases there may be only one first or business class seat.
Can airlines cap total fares?
Air Canada said in a statement that the social media example of a C$4,500 (about $3,322) flight from Yellowknife to Calgary was aggregating fares from booking websites. Some flights took him up to 21 hours, with multiple stops served by other airlines, compared to the two hours a regular direct flight to Calgary would take him. .
“We are working to amend these total fares wherever possible,” Air Canada said in a statement.
Air Canada has announced that it has canceled approximately $1,000 Canadian dollars in business class fares for one flight out of Yellowknife and replaced them with regular fares. It also said it would offer refunds to passengers who purchased tickets before the fares were revised.
Travel site Expedia Group (EXPE.O) said airline partners set ticket prices and availability on the airline’s website. “Airlines are free to adjust the displayed prices and seat availability.”
Air Canada operated flights from Yellowknife to Calgary on Tuesday and Saturday for just $303 CAD. Rival WestJet was offering direct flights on the route on Monday for C$122.98.
Airlines still have the power to cut fares in times of disaster. Several U.S. airlines offered a $19 fare for a 40-minute evacuation flight from Maui to Honolulu this month to help people evacuate wildfires that have killed at least 114 people this month.
“With Maui, it’s clear that U.S. airlines are doing their best to be good neighbors and evacuate residents and visitors,” said Robert Mann, a U.S. aviation analyst. “These $19 fares were manually capped per the airline’s instructions.”
Mann suggested that U.S. airlines may have learned from the derailment of an Amtrak train from Washington to New York in 2015 that increased demand may have led to higher fares and accusations of hoisting.
(1 dollar = 1.3546 Canadian dollar)
Reporting in New York by Alison Lampert and Doinsola Oladipo Editing by Denny Thomas and Josie Kao
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