Model Planes

The truth about how airlines price your ticket

As an airline industry insider, I am going to shed some light about how airlines price their seats.  To most travelers, this appears to be a rigged game to squeeze every cent out of you.  The truth is, it is.  However, there are several tricks and tips you can use to get the best fare possible.

The first component of the price determinant comes from the fixed cost of getting a person there and the infrastructure.  The cost of the plane, the personnel to run it, and the fuel are the biggest components into a ticket price. Airlines say we are running this plane and it costs this much to operate to get there and we need x amount of dollars to break even. To hit the break even point, airlines price the biggest discount months upfront so they can hit this target early.  That is why you should always book in advance.

Forecasting supply and demand also comes into play.  If there is a big event going on, airlines Model their pricing structure accordingly and raise prices. However, if there is competition, or more supply, then this plays a role as well. Some people may ask, why does it cost $400 to travel to Tulsa and only $200 to travel to Orlando when Tulsa is hours closer? The answer is competition.  Not many airlines operate to Tulsa so they can charge more because you are left with no other option.  Fly my airline or take the bus or walk you have no choice.  Whereas to Orlando, almost every airline flies there so someone else “competes” for your fare.

Finally, time is the last component.  In general, the closer you book to your travel date, the more you will pay.  Airlines figure you are booking late for one of two reasons.  First you have an emergency.  If you need to get somewhere tomorrow ASAP, guess what airlines are going to price gouge you because you are desperate.  Same goes for business travel.  In general, businesses need to travel quickly sometimes and immediately so why not stick it to the rich corporation who are also desperate? 

Lastly within your class of first, business, and economy, there are additional classes. In economy for example, there are up to 10 sub classes each carrying a different price level and different restrictions.  The cheapest may be non-refundable, staying more then 2 days or a Saturday night stay (remember business people don’t usually spend 2 nights somewhere or the weekend).  The most expensive economy ticket may be fully refundable, and have no restrictions. So the person next to you may have paid 3x more then you or paid half of what you paid for the same seat! 

Airlines have made a science out of pricing.  It should come as no surprise, that this is their bread and butter.  However, if you know how they operate, you stand a good chance of picking up a great fare at a great price. So in general, don’t wait to book you ticket, try to stay away from “rural” airports if possible, and stick too destinations with lots of competition. Stick to those guidelines and above all, enjoy your trip.

About the Author

Travel and save with one of our cheap flights or opt for a vacation package. Flights.com® has cheap tickets for domestic and international travel including hotels, car rentals, and cheap airline tickets to Europe and beyond.

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