- Airlines unleashed lower fares than ever this week to destinations like Tokyo, Japan, sitting up demand.
- But while Americans delight in their cheap flights, the gamble lies in whether they’ll able to take them.
- Most countries have not opened their doors to US tourists even as vaccinations soar.
- See more stories on Insider’s business page.
Airlines are making it hard for Americans not to book international trips by unleashing dirt-cheap fares to normally expensive destinations, and the irresistibly low prices are breeding a new form of gambling.
A small sampling of deals this week includes $226 round-trip flights to Tokyo, Japan on United Airlines from Philadelphia, $313 round-trip to Italy on Delta Air Lines from Miami, and $320 to France on Finnair from New York.
Even with most of the world closed to US tourists, many Americans have not been able to pass up on the deals airlines are offering despite the risks. Professional deal-finders say that they’ve never seen anything like the deals on display this week.
“[This is the] craziest deal week of deals we’ve seen in a long time,” Scott Keyes, founder of Scott’s Cheap Flights, told Insider.
But while travelers are planning their newly booked trips, the question of whether these countries be open to Americans in time lingers.
Henry Harteveldt, an industry analyst and confound of Atmosphere Research Group, calls the phenomenon the “price of courage” where customers see a fare so low it makes them willing to book and take the gamble that they’ll actually be able to go.
That price varies from destination to destination, and many Americans discovered their price of courage when flights Japan went on sale this week. While flights to Europe could be had for $300 before the pandemic, a traditionally expensive destination like Japan was irresistible to many at the price-point of $200, even though the country isn’t open yet.
Keyes said that Japan is probably at the top of the list for most of his subscribers given the traditionally expensive nature of flights to the country. And the “mental swing” of realizing it’s cheaper to fly to Japan than it is to fly across the US, in some cases, likely made the deal too good pass up for many.
Airlines know that the borders are not yet open and are still offering the fares for as early as this weekend. But they likely aren’t unleashing these fares hoping the borders don’t open up and flyers will lose their money.
“I don’t think the airlines set these fares out there with a devious mindset of, if you will, bait and switch,” Harteveldt told Insider. “That’s not the way they work. These low airfares also, to a certain degree, show some airlines’ desperation.”
The sales are an easy way to quickly bring in revenue by creating demand for a popular destination in the hopes it will be open in the near future.
“Airline pricing managers are really good at tempting us to book travel,” Harteveldt said. “They are offering these low fares in order to attract and layer in a certain level of reservations and bring some cash across the threshold because, obviously, airlines still have expenses.”
These flights won’t be profitable on $200 fares alone, of which the airline only gets around half after taxes, and flyers will be tempted by the airline to spend extra on things like priority boarding, extra legroom seats, and lounge access.
Profitability could also come from the belly cargo that can be carried or if business travel resumes and the premium cabins are filled by corporate clients.
How flyers can hedge their bets on international travel
Even with some countries opening their borders to Americans, booking any international travel is a risky bet.
Japan has maintained strict travel barriers during the pandemic and has already barred foreigners from visiting to spectate the Tokyo Olympics this summer. As of now, two-week quarantines for all inbound travelers to the Land of the Rising Sun, even those with negative COVID-19 tests, according to the US Embassy in Japan.
Europe is showing more promising signs of opening but not even the airlines selling the tickets know exactly when the borders will open, despite their best efforts to get them open. And while it may seem that the only safe bet is to book tickets to countries currently open to Americans like Iceland, Greece, and Croatia, border controls can change depending on the virus.
Chile opened its borders to tourists in 2020 only to close them in March, prompting American to delay its planned non-stop flights from New York until June.
The most recent deals do give flyers options to hedge their bets, especially as most US airlines have eliminated change fees. United started the trend of eliminating change and cancel fees over the summer, and that includes flights to international destinations like Europe and Japan.
“Going forward, you also won’t have change fees for other international travel that originates in the U.S.,” United’s website says.
American, also offering dirt-cheap fares to Japan, is also waiving change and cancel fees for economy tickets and up. “Effective immediately, American will eliminate change fees for first class, business class, premium economy and main cabin (except basic economy) tickets for all long-haul international flying when travel originates in North or South America,” the airline announced in November.
Many of the lowest fares advertised by American, however, are basic economy fares that aren’t covered until the new policy, so flyers will have to pay up to economy for that flexibility. Flyers should be checking these rules when booking any international travel as it could save their trips in the event a country doesn’t open in time or closes its borders again.
Booking trips as far in the future as possible can also increase their chances of the country being open by then but the bottom line is that there’s no guarantee.
What to do if a country doesn’t open its borders
Free cancellations and changes also aren’t always free. Flyers who cancel a trip under the policy will most likely get a travel credit, not a cash refund, and those making a change will most likely have to pay a fare difference.
For example, if a traveler booked a round-trip flight to Japan for $226 and the flights on the dates to which they want to change only have flights for $700, they’ll have to pay an extra $474 in the fare difference.
But with airlines constantly changing their schedules, there is a good chance a traveler will incur a schedule change, the term for when an airline changes any aspect of a flight. If a traveler incurs a schedule change, they can use it to get a full refund, which could be helpful if the country they’re supposed to be visiting doesn’t show signs of opening.
The perks of booking with a US airline that allows free changes is that the value of the ticket can instead be applied towards any flight in its network. Flights between New York-Los Angeles, for example, are currently selling for around $217 round-trip, potentially salvaging a trip by just changing the destination.
Keyes has shifted his business during the pandemic to educate flyers on how they can make the most of pandemic travel, even with all the uncertainty. Travel to certain restrictive countries, like Japan, is cautioned against and there’s a coronavirus travel resource guide on the Scott’s Cheap Flights website.
“There’s not a 100% guarantee that these [international] trips will happen but the downside risk of being in a situation where you would lose your money … I think is quite low,” Keyes said.