How to get the best deal on transatlantic air tickets in 2006

One of many choices

So far for 2006, a large percentage of ticket shoppers who have contacted our air department (800-521-6722) have been put off by the fares quoted and say they'll wait until the prices go down in early 2006. What they may not be taking into account are much higher security fees, fuel surcharges, and taxes than a year ago. These could amount to as much as $380 of the total ticket price; routinely the extra fees equal more than $200. Last year they were in the $80 to $125 range.

There's also more to the story than higher taxes: demand for seats across the Atlantic in 2006 is very high, and based on what we know about the volume of bookings to date, airline pricing practices of the past couple of years, and certain other factors, we don’t think waiting to buy your tickets is a good strategy.

Here's why we believe prices are not going any lower:

1. Heavy Advance Bookings: Air ticket sales for 2006 through mid-December far exceed anything we have seen in recent years. Some Lufthansa flights in the highest season are already sold out.
2. Past Performance: In each of the past four years, the early buyer got the best fares: the January buyer paid less than the February buyer, who paid less than the March buyer, who paid less than the April buyer, and so on. Last January, some buyers passed up tickets for high season travel that cost $1,000, only to pay $1,400 for the same tickets in April. Yes, there were sales, but they were brief (often only a few hours) and not industrywide, and the resulting price cuts were not deep.
3. The World Cup: With the world’s most popular sporting event scheduled for Germany this summer, millions of extra visitors are headed for Europe. In fact, this year Lufthansa has added a peak season to its usual low, shoulder, and high seasons. It calls for even higher fares during May and June than in the regular high season of June through September.
4. 2007 Increase in German VAT: One year from now, on January 1, 2007, Germany's value added tax is scheduled to rise from 16 percent to 19 percent. Some travelers are getting in a trip this year, before the increase.
5. Stronger Dollar: Based on currency exchange rates, it's about 14 percent cheaper in Europe today than it was one year ago at this time.
6. Higher Car Rental Rates: Further evidence of the expected high visitor count can be found in the Sixt auto rental company decision to raise its rates during World Cup time—something we have not seen for other major events in Germany.

Sophisticated computer software enables airlines to precisely monitor ticket sales and accurately predict, weeks and months in advance, just how many tickets are likely to be sold for each flight. The goal is to sell every seat. In winter, when demand is low, fares are reduced to attract more buyers. In summer, a greater demand keeps them high. Lufthansa, for example, has no incentive to sell a seat for $1,400 when it can sell the same seat for $1,500. The only bright spot for the consumer this year is that airlines are adding flights to meet the rise in demand. If the supply of seats begins to exceed the number of buyers, we can be assured of a reduction in prices. But even in that unlikely event, the price drop will be modest and the flights offered the least desirable.

On the other hand, the buyer who waits until March or April to purchase will likely find a picked-over flight inventory and prices $200 to $400 dollars higher than they are today. To wait for a price reduction of $50 to $100 — one that every indicator says is unlikely to come — versus the absolute certainty that as summer approaches ever closer, and there are fewer and fewer seats available, fares will rise hundreds of dollars, seems to us a very poor percentage play.

The Internet and your local newspaper’s travel section are advertising some great-sounding low fares. Problem is, they are seldom available when one tries to book them. Want to know what transatlantic tickets are actually selling for right now? Here are a handful of recent actual ticket sales by our air department. Prices shown include all taxes and fees:

• $539, New York-Berlin-Frankfurt-New York, March 17-27, Lufthansa
• $653, Miami-Munich, May 4 – 25, LTU (nonstop)
• $1058, Eugene, Oregon-Frankfurt, May 22-June 2, Lufthansa
• $1141, San Francisco-Salzburg, May 15-29, Lufthansa
• $1198, San Francisco-Zürich, June 6-July 6, British Air
• $2462 (Business Class), New York-Geneva, January 28-February 5, Swiss International

Submit an air tickets quote request now, or contact the Gemut.com travel department at 800-521-6722.