Have you ever gone online to find that the price of an airline ticket has doubled since last night? Airline prices remain a mystery to most, but there are basically three major factors that influence the variable price tag:

Yield Management - This is a complicated computer-based model that constantly adjusts the prices of the remaining inventory of tickets to yield the greatest dollar amount for the remaining seats. (Pretty smart, huh?) The program uses many inputs including historical booking patterns, demand, market competition and events in the market to squeeze as much revenue as possible from every seat.

Competition - If American Airlines is competing against U.S. Air, or Delta, their prices will stay similar because all of these major airlines use similar yield management software. But if they’re up against a low-cost provider like JetBlue, they’ll have to adjust their prices for the effected flight routes in order to stay competitive.

Cost - This is lowest priority in setting prices since the going rate for seats, availability of aircraft, and customer demand are all ultra-sensitive to fluctuating markets. Often, airlines are not able to pass their costs onto customers because, well, there are always other means of transportation if flying is too expensive.

While airline prices are going to fluctuate dramatically, understanding the fluctuations can help you book the best plane ticket, and get a good deal. You can also try sites like kayak.com and others, which show you the average prices over time for the flight you’re planning.

Tags: airline tickets, plane tickets, revenue