Air Fare Going Up and Down

[mailbroad]

I know that this happens and airfare can be a crap shoot but WHY does it happen? By this question does the airline say, "OK Let's make the fare go up for a day or two so people get worried and book and then we will make it go down."

 

I ask because I looked at air and the return ticket was $119 at 11pm. The next day it was $144. I booked at that price. Now, 4 days later it is $109. There was a coupon special of $25 if you signed up for their e-mail list but it ended January 2. I was able to take advantage of that. I am not really upset but just thinking, This is an "It figures" kind of thing. Tomorrow it could be $169!

 

But, maybe if we knew we would be able to get better ticket prices! Maybe farewatcher would have been helpful.

[paul929207]

Airlines smetimes try to raise fares. If other airlines match the increase, then they stick with the new prices. If no one matches then they drop back. This is usually done over a weekend.

[FritzG]

For some reason I seem to find the best fares early on Saturday mornings. I don't know why, but that seems to be when I find my best deals.

[Keith1010]

There are so many factors that affect the airfare price and it can change by the hour or day, etc.

 

In the end, you just have to figure out what you think a good price is and lock in when you see it. Sometimes you'll get it at the lowest price other times not. No different than many other items that one purchases.

 

And as we all have learned timing is everything. Look at the stock market.

 

Keith

[Globaliser]

I know that this happens and airfare can be a crap shoot but WHY does it happen? By this question does the airline say, "OK Let's make the fare go up for a day or two so people get worried and book and then we will make it go down."

In part, yes. But it's much more complex than that. Airlines are operating in an environment which is more like a giant commodity market than anything else. They have to be competitive against other airlines' prices at that time, so there's a lot of price-matching going on.

 

But the biggest part of it is a black art called "yield management". When the flight finally departs, it will have been on sale for almost a year. There'll be anything up to 400 or so people on board the aircraft. Pretty much everyone will be travelling for a different reason, on a different budget, and in different financial circumstances. This wouldn't matter if every seat was the same price, like cans of Coke in a supermarket. But they're not. The airline's job is to mix and match the price of each seat sold in a way that, so far as possible, screws out of every passenger the maximum amount of money that they are prepared to pay for their flight (note, not simply the amount that they'd like to pay for their flight). That's done by a mixture of limiting the number of seats sold at particular fare levels, having different fare rules for different fare levels, and allowing the supply to come and go in real time. To explain it fully would probably require a multi-volume book. But that's a very large part of what you're seeing.

[TazzMann]

The Hotel Industry utilizes the concept of "yield management" as well. They forecast (budget) to sell rooms (seats) to achieve an "average price per". That's why some prices are low and some are high depending on where the "yield" is at any given time.

[fbgd]

For some reason I seem to find the best fares early on Saturday mornings. I don't know why, but that seems to be when I find my best deals.

 

Probably psychological more than anything else. At least you didn't say 'they are cheapest at 4am on Tuesday because not many people are awake'...having to read that, or similar BS on several other Airline forums drives me nuts.

 

But the biggest part of it is a black art called "yield management". When the flight finally departs, it will have been on sale for almost a year. There'll be anything up to 400 or so people on board the aircraft. Pretty much everyone will be travelling for a different reason, on a different budget, and in different financial circumstances. This wouldn't matter if every seat was the same price, like cans of Coke in a supermarket. But they're not. The airline's job is to mix and match the price of each seat sold in a way that, so far as possible, screws out of every passenger the maximum amount of money that they are prepared to pay for their flight (note, not simply the amount that they'd like to pay for their flight). That's done by a mixture of limiting the number of seats sold at particular fare levels, having different fare rules for different fare levels, and allowing the supply to come and go in real time. To explain it fully would probably require a multi-volume book. But that's a very large part of what you're seeing.

 

Nice explanation. I prefer just to say there is some black magic attached to it and leave it at that!

[mailbroad]

Thank you for your replies.