How do airlines choose what to charge you?
Airlines only care about one thing. MONEY!
And that is usually achieved by the amount of PROFIT they get from each flight. Note that I use the term “PROFIT” explicitly. That’s because it doesn’t automatically mean getting the most bums on seats, but rather what is the most amount of money they can realistically charge each passenger.
That guy or girl sat right next to you could be paying double the price for their ticket for the exact flight in the exact same class of travel. Or maybe, if your schedule was moved around by a few days or so, you could be paying hundreds more for your ticket.
Welcome to the world of “Yield Management” — the common pricing strategy adopted by airlines, where essentially, those who are willing to pay the highest fares will be charged accordingly (basically business travellers!), through three major factors.
Let’s break them down accordingly:
1. Day of the week
According to Airfarewatchdog, most business travellers travel on a Monday morning and most leisure travellers travel out on a Friday for a weekend break. As a result, with the demand being there, airlines would often increase their prices when they anticipate the highest demand at those times.
2. Seasonality
Pretty much when the kids are off school, such as Christmas, Easter and that long Summer Holiday, airlines tend to steeply increase their prices to reflect on the fact that it is a common period for many families to go on holiday at the same time. According to the UK Government, if you do take your kids on holiday during term time without the school’s permission, you could even get fined!
3. How long in advance?
The earlier you book, the cheaper it will be? That’s pretty much the logical de-facto rule to booking a flight, right? There are some exceptions. Since airlines are constantly checking on demand of each flight to try and get the most bums on seats, it is potentially possible, although extremely risky, for an airline to dramatically drop the price a few days before departure if the flight is relatively empty. But generally, the earlier you book, the cheaper it’ll be.
With these three factors combined, alongside their years of experience noticing these trends, that’s how airlines charge you!
I hope you find this quick read useful to know, and I’ll follow up soon with my own personal tips to finding cheap flights.
In the meantime, download Trarvel and get exploring!
Happy Travels, signing out.
Photo Credit — Naletu via Unsplash
