Posts Tagged ‘plane tickets’

Why does the price of a plane ticket change so much?

Friday, January 8th, 2010

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.

Winter Forecast: Fewer Flights And Higher Fares

Thursday, October 15th, 2009

American airlines are taking a hint from European discount airlines: pack ‘em in and charge extra for everything.

  • Though the economy is picking up elsewhere, the airline industry is still struggling. And that means higher fares and more annoying fees for you, the traveler.
  • To save money, many airlines are paring back their schedules, which will decease the total number of  flights available. At the same time, business travel is expected to increase, which will limit supply even more.
  • Many airlines have already added a holiday travel surcharge, and are also considering additional fees for online booking, advance boarding, and infants.

Facts & Figures

  • According to Tom Parsons of BestFares.com, the cost of domestic flights has increased recently by more than 50%.
  • Delta, American, United, and US Airways will be charging an extra $10 per ticket on certain holiday travel dates this winter.

Best Quote

“Even with the new fees, airlines are losing billions. So it’s either fees, higher fares, or we’ll see some more airlines fall into the aviation ash heap along with TWA, Pan Am, Skybus and Independence Air.” – George Hobica,  Founder of AirfareWatchdog