The Low-cost Revolution Lowered Airfares, but Not if You Don’t Order Well in Advance

Now is the time to plan your summer vacation, it is probably too late for good deals for Passover: What to avoid.

FILE PHOTO: Massive lines at Israel's Ben Gurion Airport. March 2, 2016.
The lines at Israel's Ben-Gurion Airport will be even longer during this Passover's holiday exodus. Ofer Vaknin

The Purim holiday is over, the costumes are packed away and the kids are back at school, so now would seem to be the time to plan your Passover vacation.

The problem is that you might be too late for a good deal. Israelis who waited until now to book an overseas vacation for Passover in less than a month’s time will find they have missed the boat – or airplane, to be precise. They should focus on finding a cheap summer vacation instead.

In April, over 1.5 million passengers are expected to pass through Ben-Gurion International Airport on over 10,000 flights.

The Israeli aviation market has undergone big changes over the past few years, and Israelis have changed the way they vacation in return. The Open Skies reform allows foreign low-cost airlines to serve Israel and that has increased competition. The number of destinations on offer has risen from 110 in 2012 to 140 this year. Now regularly scheduled airlines have taken on the pricing style of their low-cost competitors, which encourages booking well in advance in return for lower fares.

“The basic idea is that every plane is divided into classes and every class has a specific price,” says Ronen Karaso, the marketing vice president of ISSTA, Israel’s biggest travel agency. “The minute an allocation for a certain class is finished, the next class in line is more expensive, even when sometimes it is a seat in the same row in economy class.”

This is how the airlines entice travelers to order package deals and flights in advance – and guarantee themselves the fewest possible empty seats well in advance, knowing that the closer it comes to the vacation, the more pressured people are and the more they will be willing to spend.

This strategy appears to have proven itself for the upcoming Passover vacation period. If you booked tickets in early January you could save tens, and often hundreds of dollars on each ticket, compared to ordering from late February on.

The year of low cost

 

In general, travel companies are reporting much lower airfares than last year. Families who book tickets in advance on low-cost airlines benefitted the most, says Erez Bousso, the CEO of the Smartair search engine and website for finding cheap flights. Israelis do not necessarily prefer regular carriers over low-cost airlines, he says. This year about 62% of the tickets ordered for Passover through Smartair were bought from charter and low-cost airlines, compared with 40% to 60% last year. More and more families are booking early, says Bousso.

The drop in prices has two main reasons. The growing number of flights and airlines serving Israel and the heightened competition between them is the first reason. The IAA says the cost of flights to Eastern and Western Europe fell by 13% in 2016, compared with 2013, while flights to North America and the Far East dropped by some 20%. Airfares to Africa fell by a third.

The price competition is especially intense when many airlines fly to the same destination. This summer, 11 airlines will fly to France from Israel, and the same number to Italy. Ten carriers are competing over Spanish destinations and nine each for the Greek isles and Germany. A new duty-free shopping facility will open in June in the old Terminal 1 at Ben-Gurion, where international charter and low-cost flights leave from, including such airlines as Blue Bird, Ryanair, easyJet, Wizz Air, Arkia, Israir, Pegasus and El Al’s Sun d’Or and UP brands, to 23 destinations in Europe.

The second reason for the drop in airfares is favorable exchange rates, particularly for the dollar and euro against the shekel in recent weeks. This has led to reductions of 15% or more in prices compared to previous years. Airfares to some destinations are even 30% or 40% lower, says Dana Lavi, deputy CEO of the Daka90 online travel site. Flights to New York with a short connection in Europe for Passover are going for $550 to $600 less this year, levels that have not been seen for years, she says.

The low airfares and large supply have brought a big increase in overseas bookings. Eshet Tours reports a 30% rise in reservations for Passover, compared with last year.

The most sought-after time for flights are the intermediate days of the Passover holiday, which allows families to celebrate the Seder at home with family and relatives, while at the same time still taking advantage of the time off work for a trip abroad.

Buying a ticket for the beginning of the holiday, or even for the weekend preceding it, will be cheaper – and might have better weather, too – even if they don’t order as far in advance.

The concept of ordering at the last minute is disappearing in recent years, says Yaniv Schuldenfrei, CEO of the Alice website for finding and booking flights.

Two bits of advice are available for those who have still not ordered tickets for the Passover holiday. Now may be the peak time for prices, but last-minute bargains may still be available because of the large supply. Another possibility is to book a flight with a stopover or connection, even if it is a long stopover. For example, a flight to London with a layover of 12 to 20 hours in Cyprus or Turkey may still be cheaper, sometimes by over $100, and you can still enjoy a short visit somewhere on the way. Another way to lower costs is to fly to one destination and fly back from somewhere else.

If you do not limit yourself to a specific destination and are willing to search for good last-minute deals, you can still find some low prices even now, says Lavi.

Rhodes and Crete, once a favorite of sun-worshipping Israelis, can still pay off at the last minute, says Galit Zakai of Eshet Tours. The weather is still not ideal, but package deals are available starting around Passover, so you can still find attractive prices at the last minute for those destinations, she says. This is not for everyone though, especially families looking for top-quality hotels over the holiday, as places fill up early.

Travel agents say the time to book your summer vacation is now, as Passover is the start of the season and the time to rush and find good deals, especially because of the strength of the shekel at the moment.

Who stays in Israel?

 

Demand for vacations inside Israel has fallen somewhat this year, while orders for overseas vacations are steadily rising, say travel agents and others in the industry. The reason is the relatively cheaper prices during the Passover period outside Israel.

The popular destinations for Israelis who want to remain in Israel are Eilat and the Dead Sea, and usually the reservations are for a large number of guests together, often entire extended families or groups of friends with their families.

Demand is shifting to overseas vacations, says Lavi. Israelis know how to compare prices. Religious Israelis are the only group that still insists on vacationing inside Israel, mostly because they trust the kashrut the hotels offer, she says. Some hotels overseas make themselves kosher and some groups choose this option, but in general, the nonreligious public has given up to a great extent on vacations in Israel.

The most sought-after destinations so far for Israelis over Passover are in Europe, both eastern and western, while the Mediterranean basin is less desirable because the weather during the vacation period is still not warm and sunny enough there for the “doing nothing but lying in the sun” vacation crowd.

Italy is this year’s leader, says one industry source, while others cite Prague, Barcelona, Verona and Rome for Israelis. Still others say Amsterdam, followed by Bucharest and Berlin.

“The Israeli tourist is looking for a vacation on a high level, including luxurious hotels alongside attractions for the children, and all this at a good price,” says Gil Stav, the marketing and sales vice president of Israir. “We are seeing a lot of new destinations that we offer receiving high demand.” The new in-demand destinations are those that have developed a real value package for the customer, including hotels or rental cars, he said.

Can I cancel?

 

Despite the attractive price, a low-cost vacation booked long in advance raises the risk you will have to cancel for various reasons, and you could very well never see your money back. In most cases, the tickets are nonrefundable and cannot be changed. Low-cost airlines charge more for the ability to make changes, and this additional cost can make the ticket price unattractive, even when compared to regular airline fares.

What you can do to prepare is to buy general medical travel insurance, which will cover other cancellations too, if bought far enough in advance. Travel insurance for Israelis going overseas will change as of August because of regulatory changes, which will make cancellation coverage optional, but still available at an additional cost.

Another possibility is buying travel insurance just for cases such as cancellations, separate from medical insurance. These come in many forms and prices, including the amount covered. Sometimes the additional cost of a good, comprehensive insurance policy can make it worth skipping the cheap fares and going for a regular airline ticket. Caveat emptor!