After finding out that I won’t be getting much Christmas vacation this year (the fate of the new hire grunts) I began to think about how I should best plan Christmas with the family. My first thought was to wait until Christmas was a bit closer to purchase a flight – hoping that by November I would know my work schedule, etc. But the more I thought about it the more I realized that I wouldn’t have an ice cube’s chance in hell of getting a ticket in November. This is where the hedge comes into play.
If I purchased a ticket today I could get it for around $250. If I waited until November and actually found an empty seat I could easily pay twice or three times as much. However, I don’t know what my schedule at Christmas will be or when I can fly right now. By waiting until later to buy my ticket though, that time becomes much more valuable as demonstrated by a hugh increase in ticket prices.
Well, most airlines realize that plans sometimes change and offer to change your ticket for about $100 (depending on the airline). How does this help you? Consider it an insurance plan (or hedge) for my Christmas vacation.
If it turns out I can fly on the weekend I booked then I saved myself between $300 and $600! If I find out I do need to change my ticket I’m still saving $200-$500! It’s a win-win situation in either case. And by hedging my vacation plans I am able to fly in December at today’s prices.