Thursday, May 6, 2010
The principles of free market I
Salam and greetings to all,
My first economic subjects were during those days of secondary school and A-Level studies.
I flunk an economic paper once, but came back with the highest marks for its resit paper.
Things that I can remember learning were:
1. Demand and supply determine the prices
2. Transportation costs should be internalised in your prices setting.
3. Pricing decisions can be influenced greatly by marginal costs.
Things that can I can apply these thoughts on:
1. Purchasing Airasia ticket online:
i. buy one ticket per transaction, because the second (tag-along) person might reduce your chance of getting the lower rates/prices. In essence, the lowest priced ticket is available only for one seat. the tricks these airlines played on you...very misleading.
ii. buy ticket preferably when the airline launches the new route, because it does not know the market capacity and depends on your reaction to identify its viability.
iii. buy ticket around two weeks prior to departure, because airlines would be panicky by this time if they do not have the sufficient demand for departure, hence reducing their rates/prices.
p/s: I am not sure about all these theories but I have made majority of my bookings on-line based on these assumptions. Never have been a booking via agents or airline centres resulted in a cheaper flight ticket.
2. Two largest costs of travelling are flight tickets and accommodations
i. buy flight ticket as soon as possible, tickets/fares have not been cheaper with time, especially not in these days
ii. buy tickets carefully especially on-line, because one single mistake will cost sometimes more than your ticket prices (i.e. if you booked a-zero-dollar seat).
iii. have friends/family members in all countries, all continents who can provide free/cheap accommodation or direct you to one
iv. if you have a nice house/home, join the exchange holiday accomodation club where you can exchange places with many members in other countries during holidays.
v. join the youth hostel association YHA to get better rates for YH. However, at my age you cannot pass as a youngster anymore. So I'd normally settled for those frequented by back-packers.
Of course, these ideas are limited to budget-travellers. I am by no means referring to those having unlimited budgets or being fully sponsored.
All feedbacks are welcome.