Comments on: Free business idea

By: BarCamp Cork - Business Ideas « AntGalvin’s Blog

BarCamp Cork - Business Ideas « AntGalvin’s Blog — Thu, 30 Oct 2008 17:05:12 +0000

[...] is another example of a genius idea just chucked out there in the hope that someone else will make something of [...]

By: John P

John P — Fri, 10 Oct 2008 11:18:00 +0000

@Deepak

Fair point re: the airlines – I am sure that they want their lunch only for themselves

Re: the inventory – this is certainly the case, and why you would only want to invest in the most highly trafficked routes and times of the day to minimise your % unsold.

A hotwire model would definitely be possible, but goes against the models that these airlines use atm to screw the last-minute traveller who is their most profitable customer

@Dave There are a few other specific sites as well that deal with that aspect – farecompare is one, I think…

By: Dave

Dave — Thu, 09 Oct 2008 20:13:29 +0000

@Paul: maybe you were thinking of Kayak.com, they have a “fare history ” of ticket prices located under “chart view” when you do a search on flights.

By: Deepak Das

Deepak Das — Thu, 09 Oct 2008 18:06:55 +0000

Yes there is probably nothing illegal with that. However I am also sure that each one of us does not read the 2 page fine print of rules for each ticket. Airlines will have hordes of lawyers who will be looking to issue a ‘cease and desist’ order once they realize that you are eating their lunch.

Also, I think that you are underestimating the costs for buying these tickets, one-way tickets ahead of time (you incur holding costs just like inventory), now you need to be able to sell them, and not knowing what the % of tickets that may not be sold and you end up in losses on those tickets.

A hotwire (rev-share I think is how they work) model may be a better model because it brings together both the industries. The Airline with unsold seats on planes and the last minute consumer with a absolute need to travel. My 2c.

But if Pat Phelan starts it, it may be the next biggest thing since the internet. Who knows. He can include it under the umbrella of “MaxRoam”….

By: John P

John P — Thu, 09 Oct 2008 12:47:44 +0000

But Deepak,

A couple of questions / points?

1. Why would you be “shut down”? Surely there is nothing illegal about the practice?

2. If you choose the most trafficked routes (like Cork-London Heathrow; London – Paris), you minimise your risk ….

3. If you purchase one-way tickets, most airlines now price o/w at half of the return journey, so return dates become unimportant.

Think the concept “has legs” but unsure after that …

By: Deepak Das

Deepak Das — Thu, 09 Oct 2008 11:28:30 +0000

I would think that as soon as airlines get the slightest hint of such a company siphoning off their meager profits, you will be shut down. Airlines don’t make any money on most routes until they have filled about 70% of the seats. The last minute business travelers are their profit earners. Plus you have to put upfront money today and sit on it hoping that someone has a last minute need to travel someplace on a certain day (a particular date/route you picked). So there is a 50% chance you may not sell the ticket after having sat on an investment (say $200) for a few months. Note that the ticket holder incurs additional costs (change fees) because his/her return date may not be the same as the one you have on the ticket. I think that the concept just won’t work.

By: PaulSweeney

PaulSweeney — Thu, 09 Oct 2008 08:40:41 +0000

Tried to find it, but I know there is a service out there that helps you search and find the “right time” to buy your ticket with an airline by tracking the historical data. I must be tired, can’t pick it off the top of my head It is an interesting exercise though, because if you were allowed block book and then develop your own resales model, that would (I think) disrupt the yield management for the airline. I think it probably has to do with understanding the demand curve. If you bought a chunk of advance seating, you probably could not do so (as a business) unless you had ‘built in’ the risk inherent in that ‘block’. Thus you are right, it is a classic market within a market, but could probably only succeed by aggregating that ‘block of risk’ across all airlines. For the sake of argument, lets call it AAA risk. Oh dear. O dear o dear o dear.

By: spg

spg — Thu, 09 Oct 2008 03:11:09 +0000

travel agents do this every day. they can easily block out any seat and hold it indefinatly as long as they renew it within a certain period(usually 1 week) of course they have to decide wether to offer it 2 months ahead or hold onto it and sell for more moneyt 2 weeks ahead but maybe not have a taker.