Most of Europe will go on holiday at some point this month, and the Economist has obligingly published an article on the resurgence in tourism titled Crowded out. It’s introduced as follows:

As British Airways' latest dispute with its unions shows, travel and tourism companies are finding it difficult to modernise as quickly as they would like. They need to keep trying, because the internet and the trend towards late booking have brought about the biggest revolution since the start of scheduled flights.

If last month’s wildcat strike over punching in and out at British Airways wasn’t sufficient proof that the airline is struggling, an acquaintance provided anecdotal evidence not long ago. He travels regularly to the south of France and noted that while the discount airline easyJet operates with a cabin crew of four, BA provides 11! No wonder BA announced a second quarter loss of £45m last week (see Losses batter bruised BA), especially given that BA has been forced to reduce its fares:

Full-service airlines are being forced to slash prices (and costs) to compete with low-cost airlines like easyJet, Ryanair and Southwest. The advent of the internet has made prices transparent, and made it beguilingly easy for customers to shop around. Customers, in turn, have become more comfortable in using the web to find last-minute deals. The effect is nothing short of revolutionary.

My wife and I are flying to Nice on BA this week, and the airfare is the lowest I’ve paid in a decade of travelling that route, which used to be the most expensive per mile of all BA’s destinations. Never before have I paid so little, which is even more astounding when you consider that we’re travelling at the height of the summer season. British Midland, Buzz (now part of Ryanair) and easyJet have finally forced BA to offer more competitive fares, and it will be interesting to see if BA has managed to simultaneously reduce its costs (i.e. the size of the cabin crew).

Although I booked these flights on-line, I did so in June, which can hardly be considered “last minute”. Experience has taught me that on popular routes cheap fares are only available if you book early. Leave it to the last minute and you’ll be lucky to find seats, let alone a good price. The Economist may be correct to say that “The web has become a vast clearing house for the travel industry's overcapacity: the more deals it offers, the more buyers it finds”, but the overcapacity only exists because the destinations are comparatively unpopular for some reason. If you are happy to go where few wish to travel then by all means use lastminute.com, but if you want a real bargain at a popular resort book as much in advance as you can.

Sumantra Ghoshal is a professor of strategy and international management at London Business School. Last week an article that he wrote was published in the Financial Times. It was titled Business schools share the blame for Enron (subscription required). It was an interesting critique of business education, and it occurred to me that his conclusion could form the basis of an excellent final exam question for MBA students:

“By incorporating negative and highly pessimistic assumptions about people and institutions, pseudo-scientific theories of management have done much to reinforce, if not create, pathological behaviour on the part of managers and companies.”

Discuss.