Why airline prices fluctuate so much within a matter of a day?

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Is there solid justification? It’s annoying that it can’t be a solid rate unless some kind of natural disaster or surge in location specific travel happens. And why does booking months/weeks seem reasonable prices but within a few days it’s astronomical?

In: Economics

6 Answers

Anonymous 0 Comments

Welcome to the “Yield Curve”.

An airline wants to sell every seat on the plane for the most it can get for each seat. But if it prices the seat too high then it will get zero when the plane takes off with the seat unsold. But if they slash prices in the final days before departure, they will train customers to only book at the last minute, decreasing total revenue.

By analysing thousands of flights and considering dozens of variables, the airline determines an idealised forecast of when the seats should be sold.

If a seat goes on sale 52weeks out, then by 40 weeks out they might expect/plan to have sold 5% of seats. And by 20 weeks out, 20% of seats. In the final days and weeks, this will tend towards 100%. This is the yield curve. Each flight and route will have a different yield curve.

If bookings are above the yield curve, the price will jump. If below, they will drop. By changing the price in this way they hope to either fill seats that would go empty or to get more revenue from a seat they think could be sold several times over.

Anonymous 0 Comments

The websites track individual customers, and compare it to usually purchasing behavior.

If you log in to check prices one day one, then return to check prices on day two the website will guess that you are back to buy the tickets, and increase the price.

Happened when my parents were buying tickets to visit me, they got hit with a 30% price increase.

I ordered the tickets for them, from a new IP in a different country on a machine that had not searched for over a year, and I got the original price.

I guess they are also training people to believe that the prices will always get more expensive, forming the habbit of accepting the first offer and not shop around.

Due to this I will always use Skyscanner for getting a feeling off which days to fly and what prices, and only go to the airlines page when the decision is made.

I’m also a fan of using a combination of VPN, incognito mode and not signing up with a customer account when buying tickets.

Anonymous 0 Comments

Best time to book is on s Monday during work hours!! Saves $500 the other day when booking! Also use a private browsing window that blocks cookies (incognito mode on chrome!!!)

Anonymous 0 Comments

Simple answer , Dynamic Demand Pricing systems are used by major airlines to update all fare prices in real+time based on a variety of factors that maximize the airlines bottom line. High seat costs for booking the day of or a day before have been common practice in the airlines even before these systems we used.

Gone are the days of static prices for a particular route or season. Because airlines have a wealth of data at their disposal they use sophisticated models (or have a 3rd party companies that specialize in this business) give them the best rates (sometimes down to the seat on a given Flight) that will maximize their bottom line.

Here’s a simplified example. A common flight from EWR to LAS (Las Vegas) is run through the model that looks at what time of year (is this peak convention time in Vegas?) historical passenger utilization for this flight last year,last month, etc. How many seats sold how many left, how many days before the flight, if it’s not selling fast enough fares get reduced to a break-even amount, and so on… This sets the seat rate,then every , passing minute or so the model updates based on any changes. .

These.systems are slowing being applied to all sorts of Pricing.

Anonymous 0 Comments

It costs the airline the almost same amount to fly an empty plane as a full one, so they play games with the prices to make sure every flight is full of paying customers. So they give you cheaper tickets when you buy in advance because it’s easier on them if they know that they’ve got someone partying for at least that seat. If there’s a flight that’s half empty leaving at 6 in the morning, they mark those tickets down to try and fill it up.

Also, most of them have a fancy computer algorithm setting prices, which is efficient for business but can give strange looking results.

Anonymous 0 Comments

There’s a number of factors that go into ticket prices. Its actually quite complicated.

1. First thing is ticket prices are made up of two things, the fare price and taxes. The fare price is what the airline makes, the taxes are paid to the government of the city. Taxes fluctuate from day to day so this can affect ticketing prices.

2. All flights have booking classes there are about 10 economy classes, 3-4 business classes, and first class. The class of the ticket affects the pricing the lower classes are going to be cheaper if the lower classes sell out this increases the price. Sometimes the lowest class is available on your preferred fly out date but not available on your preffered return date so this increases the price. That’s why travel agents will ask if you can fly out a couple of days earlier or return a few days later.

3. Airlines have set time limits for sale fares called a ticketing time limit. If you don’t purchase the ticket before the sale finishes this can also cause a massive price jump.

4. Other factors like a change in seasonality of the ticket can also affect pricing.

Source; I use to work as a travel agent.