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Welcome to TripStack’s blog where we highlight some very special fares. In this series of posts we explore great Virtual Interline (VI) fares and break down why these fares are amazing for both the consumers and the travel retailers.
Before we jump into the analysis it is worth having an understanding of Virtual Interlining (read about the basics here) and to understand what makes these fares so attractive. The most important factors include:
Price: Who does not want cheaper fares!
Duration: Consumers typically choose a fare if it is faster compared to alternative fares. Consumers may also select a flight that is longer (or has more stops) if there is a significant monetary difference compared to alternative fares.
Departure Time: Consumers will also select a flight based on their preferred departure time (morning, evening).
Airport Location: Consumers might also have preferences for specific smaller airports that are frequently used by Low-Cost-Carriers (LCC).
Let’s have a closer look at a special VI fare from Toronto (YTO) to Freeport, Bahamas (FPO) and breakdown the advantages of VI fares. Toronto to Freeport does not have any direct flights which automatically makes it a great candidate for a route where Virtual Interlining should be able to compete with traditional fares offered by the Full-Service-Carriers (FSC). Let's review the Cheapest, Shortest and Best options and see how Virtual Interlining stacks up against the traditional FSC offering.
The top two Cheapest options (presented below) are both Virtual Interline (VI) combinations of Flair Airlines & BahamasAir priced at $221 USD and $323 USD. The first fare is very attractive as it is both the Cheapest and also the Best available option. The fare is considered the Best option since it is the Cheapest, but also one of the shortest flights with a duration of 5h and 50 mins.
The Shortest option (below) is a 1-stop American Airlines flight priced at $562 USD with a duration of 5h and 30min.
As you can see from the examples, both the Cheapest and Best fares are both Virtual Interlining fares that are much more attractive to consumers than the traditional fare that is more than double the cost and only 20 mins faster.
Let's now look at the economics and what makes these VI fares so attractive to sell by Travel Retailers including the Online Travel Agencies (OTA):
VI fares are often unique in the market and not offered by most travel agencies.
VI fares produce the Cheapest or Best results on 40%+ of all routes.
In many cases Virtual Interline flights dominate the first page of results in all 3 categories (Cheapest, Shortest and Best) pushing traditional fares further down the page and are more likely to be purchased by consumers who are looking for the best deal.
There are also multiple revenue sources for Virtual Interline which include:
Markup: since the fare is so attractive already with respect to traditional fares a markup of 10-20% can be applied to the fare.
Commissions: Potential commission from the airlines (if the retailer has a relationship with the carrier).
Other: Additional ancillary revenue since baggage, seat selection (and other ancillaries), would be purchased separately for each leg of the trip.
If you would like to learn more about Virtual Interlining (VI) and how it can help your Travel Business please contact sales - sales@tripstack.com.