Airline Travel: Hedging Your Bets

Posted on 13. Sep, 2006 by in Saving & Investing

airline_travel.jpgAfter 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.

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3 Responses to “Airline Travel: Hedging Your Bets”

  1. Nick

    18. Sep, 2006

    Whenever I make an advance airline ticket purchase, I always use this incredible new site called farecast.com. WOW, what a site. Using sophisticated algorithms and price history on tickets, their site can actually PREDICT when would be the best time to purchase your ticket at the cheapest possible price.

    Anyways, thought that might help you in making your decision, love the blog!

  2. Allen

    03. Feb, 2007

    I agreee Jason, it can be a reall pain to cover your travel bases in advance. I, like you, have been in the “low man on the totem pole” position at work several times and felt like I was playing the lottery with my vacation plans. I could not afford to lose the money altogether, but with advance booking, knowing that I would make the trip at some point in the future, I have saved money on several occasions. Sometimes the savings was greater than the final cost of the ticket.
    While I had never heard of farecast.com, after having looked it over, I assure you I will try it on my next flight.

    Thanks again,

    Allen

  3. Juno888

    21. May, 2007

    Using sophisticated algorithms and price history on tickets, their site can actually PREDICT when would be the best time to purchase your ticket at the cheapest possible price.

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