Cheapest air tickets pitted against refunding facility

There are no universal principles to be applied in different aviation markets of the world. What could lead to profits for airlines in one market might not be beneficial for airlines in a different market. It has been widely accepted that the best way for the growth of airlines, budget or full service, is by of offering cheapest air tickets. Low fares have led to the opening of new markets and generate more business for airlines. The facility of getting the refunds for cancellations along with the low airfares has worked well in most of the markets of the world as the consumer has intended to travel more often on the scheduled time. But, in certain other markets of the world, cheapest air tickets along with the facility of refunds has resulted in airlines going into losses.

The Russian aviation market is one example where the issue of refunding of tickets after flight booking has pitted the airlines against the Federal Anti-monopoly Service (FAS). Airlines question the wisdom of offering refunds low fare flight booking is being offered to the customers. The low cost carriers of Russia contend that the refunds facility needs to be done away with in order to remain profitable in the Russian market.

Since FAS sought mandatory refunding facility by airlines, even the prices of low-cost airline tickets has not remained low since the airlines do have to factor in refunds in ticket pricing. The airlines have also resorted to over flight booking hoping that some passengers might not show up. Many experts believe that the low cost carrier model has not worked fully due to this issue. By allowing non-refundable cheapest air tickets, airlines can mark their prices down further and do not allow overbooking to protect against having a negative brand image.