AIR TICKETS – WHY DO PRICES VARY SO MUCH?

It was only the other day I was booking a Delhi Kuala Lumpur Kota Bharu flight and the price for a flight leaving on Thursday and returning on Sunday and the price shown was Rs. 39,900.00. The next morning when I sat in front of my computer with my credit card to do the booking the new price was Rs. 49,700.00! Almost ten thousand rupees extra after 12 hours.....what is going on? And this happens all the time; in fact airfares are less reliable than the weather in London disrupting the ICC World Cup Cricket matches one after the other.

The model for airline pricing is that, in a perfect world, fares start relatively low and gradually increase. The airline would like to reach a price climax in the last few days before departure. The few remaining seats should be sold at for sky-high fares, on the basis that anyone booking in the final days is really keen to travel and therefore price-insensitive. But alas, this is not a perfect world!

As it turns out, there is a reason why flight prices seemingly change every few minutes and it’s not to benefit our pocketbooks. It’s something called yield management. Yield Management is a variable pricing strategy used to control flight prices. There are three distinct components of yield management: pricing strategy, availability control and control of inventory. And each one of these contributes to the flight price changes that we see when we are trying to find the best plane ticket price. Confused? Don’t worry. You are not the only one, but I’ve simplified things for you below, so all you need to do is remember a few easy tips to get that great flight price when it drops!

Pricing strategy

The pricing strategy of yield management is all about maximizing profits based on customer need. We know that those considered to be leisure fliers (families planning for a vacation, someone booking a ticket to attend their cousins’ wedding next summer) are looking for a good deal, and are very unlikely to pay full price for their ticket. Thus, the customer is charged an amount that’s less than full price in exchange for them booking in advance. Similarly, airlines are aware that business travellers will pay more money to book at the last minute because it’s likely that they are purchasing the ticket out of necessity. Therefore, they are charged full price.

Availability control

The availability control portion of yield management is all about controlling the available product — in this case, airline seats. If airlines are selling 200 seats for a flight, they use availability control to determine how many seats to sell at leisure fare and how many at full price. This determines which seats are available to which crowd. And they use their knowledge of their target audiences (i.e. the fact that leisure travellers book in advance and business travellers book last-minute) to determine when to price these tickets accordingly. So, a Delhi – Mumbai flight will not have many leisure fare seats but a Delhi – Goa flight will.

Control of inventory

Control of inventory is the simple concept of accurately controlling (and utilizing) the availability of the logistical components that is needed to actually run a flight. These components include aircrafts, employees and flights. Control of inventory ensures that these things are maintained and available to be used by the consumers that purchase them. So when suddenly Sahara or Kingfisher or Jet disappears the inventory is strained and the airfares shoot up!

Airlines have a firm sales trend, which simplistically might involve selling 10 per cent every month before departure. If tickets are selling “above trend”, i.e. too fast, the fare goes up; all too often, though, the fares are below trend and the fare goes down. But the closer to departure, the twitchier the airlines become. As you know, once a plane departs with an empty seat, that is potential revenue which has gone forever.

If this seems incredibly confusing to you spend some time to understand it because the good news is that you can totally use this to your advantage! And using it to your advantage does not require expert-level knowledge of pricing controls and strategies. This is because based on these strategies, and data compiled and analyzed by people far more intelligent than me and you, we know the following tips and tricks that can help ensure you get the best flight prices possible:

When to book your ticket? Avoid booking flights on…

Thursdays as this tend to be when markups are posted, likely due to the increased traffic on the weekend. Some experts say that you can see as much as Rs. 700 added to a ticket price on Thursday.

Speaking of the weekend, it’s also best to avoid booking over them as well. The weekends are typically not actively monitored by airline staff but instead are automated. This means that when cheap flight tickets are purchased, the automated software will most likely adjust the remaining tickets to a higher price to compensate for the loss of profit.

Look instead for cheap flight deals on…

Mondays are better for prices because the extra seats that weren’t sold over the weekend are more likely to be discounted.

But if you want even better deals, most airlines post flight discounts between 15 and 25 percent on Monday nights. Meaning if you want to get in on these deals, it’s best to book first thing on Tuesday morning.

A few other tips to get better ticket prices are:

Plan early

Booking flights, hotels and other transports in advance saves big bucks on the travel cost. Flights are cheaper, and hotels usually have advance booking offers. The sooner the better tends to be the best way to ensure you get those cheap international ticket prices. Domestic flights should be booked 6 weeks in advance as booking even before that is not cheaper.

Beginning or end of peak season

Every destination has its own peak season, so plan accordingly. You should be able to find a sweet spot where the weather's still great but you're not yet paying the full peak season cost.  Flights to UK and Canada are invariably cheaper in winter and costlier during summer and spring. A sporting event like Cricket of Football World Cup or Wimbledon or U.S. Open will act as a catalyst to respective airfares.

Choose dates wisely and be flexible

Keep a range of proposed dates while you are planning and check booking websites regularly. You may be surprised how quickly prices can jump or fall.  And, if you can, try to fly midweek. Prices are a lot cheaper. The price difference between flying out on Sunday and Tuesday for both work and vacation destinations may be quite a bit! So board that flight between Monday and Thursday and enjoy the weekend at home or in your destination. 

Compromise on flight time

Only you will know if saving yourself money is worth the hassle of getting up at 2am for a pre-dawn flight. For those willing to do it, the savings can be big. A regular Delhi – Lucknow flight is costing anywhere between Rs. 3,000 to 7,000 but a 02.30 Hrs Air India flight costs Rs.1,800 only!

Consider indirect flights

Flights with one or more connections can sometimes offer a saving. Just like that 2am alarm call, you'll have to decide if the extra travelling time is worth the cash saving.   Once while travelling from Manchester to Athens and back we found the easy Jet flights very costly Rs. 29,800 but when we looked for flights to and from other locations in Greece we found the same easyJet had a flight to and from Thessaloniki for Rs. 17,400. The newly upgraded rail link means Greece’s second city is only four hours from the capital – and a worthwhile location in its own right if you can arrange to spend some time there!

Check flight inclusions

Make sure you're seeing the whole cost of the journey - taxes, luggage and any other add-ons - when you're planning. The ticket is often not the only cost... and sometimes not even the most expensive. Compare carriers and make sure you take all the costs into consideration before you book.  

Subscribe

Many airlines, travel operators and hotel chains offer special packages and deals for their subscribers. Check their websites and subscribe. If you can face going through the endless emails, you may find some great offers in there.  Some airlines offer seasonal sales for seat tickets or flash seat sales and these are really throwaway prices!

Know your baggage specifications

Avoid last minute baggage charges by checking your baggage weights and measurements in advance. With airlines increasingly strict about restrictions and keen to charge you extras, this is an easy way to make sure you don't incur unwanted fees.  30 Kg in international flights and 15 Kg in domestic flights are permissible in full fare airlines and for budget carriers you must know the limits specifically.

Travel at night

If you can sleep anywhere, this is a simple method to save on the cost of a night's accommodation. 

Carry your ID cards

If you are a student or a senior citizen, you might get special prices or even free tickets for certain activities. Always carry your ID cards to take advantage of these

Beware of trackers!

Airline websites track your cookies, that means that they know when you’re looking and how often. This allows them to manipulate the prices you see and avoid offering you lower prices simply because they know you’re on the hunt for tickets.

When you visit a website, you are of course observable by the site itself, but you are also observable by third-party trackers that the site embeds in its code. You might be surprised to learn that the airlines and travel websites include many of these third-party trackers. They do so for a variety of reasons, like for advertising, analytics, and social media. Each third-party tracker exposes some of your personal information to the company behind it. With so much data from so many websites, these widespread trackers (and the companies behind them) can develop extensive individual profiles, which can include browsing, location, search, and purchase history. Then, these profiles can be used for anything, including following you around the web with creepy advertising or hiking the price of the air ticket you are hunting for! 

The solution? Search on Skyscanner. This isn’t your average shameless plug, the Skyscanner app along with the website is specifically built with that problem in mind. So when you search you’re actually finding the lowest prices, not the lowest price the airline wants to give you because they know you’ve searched “flight to Madrid” 21 times in the last three weeks.