The prices for airline tickets change most of the time. There’s a reason why airline ticket prices are always changing. There is a good reason for this that makes sense. Look at ticket prices from the airline’s point of view to understand them.
How airlines price tickets?
There are several components to the price of your ticket: the base fare, taxes and airport fees, fuel surcharge, service fee to issue, food, seat selection, and luggage.
The last four are sometimes extra, and you have to pay extra for them (especially on low-cost airlines) if you want them. With older, more traditional airlines and on long-distance flights, these things are usually included in the price of the ticket.
Price factors for airline tickets
Most of the time, pricing is done automatically based on past experience and set parameters. This wasn’t always the case, of course. Most international routes were run by a single national airline, and because consumers didn’t have a choice, prices were high. All of that changed, though, when deregulation took place, and the government stopped controlling routes, prices, and how new airlines could get into the market.
Today, prices are not set or controlled, and airlines will try to sell as many tickets as possible to make as much money as possible. Pricing is about figuring out how much a ticket is worth to each person and getting the most money out of it.
Prices change based on how many seats are available and how many people want to buy them. Even if you have three months until your trip, the cheaper booking classes might be full. If you’re going to be traveling during peak season, you should book your trip about six months in advance to get the best prices and most choices of seats and upgrades.
More flexibility, cheaper tickets
In general, the more flexible you are, the less you will pay for your tickets. If you are more flexible about where you want to stop, when you want to travel, and which airlines you want to use, your agent will be able to change your itinerary to the cheapest, most direct route, dates, and airlines.
How airlines price today
Each airline sets and changes prices using its own algorithms and AI technology. This still needs to be checked by a person, but it’s a big change from when fares were set and changed manually.
A lot of data analysis goes into setting prices. In recent years, this area has changed a lot for the better. Airlines have always kept track of sales and bookings and used this information to set prices for the future.
Airlines also keep track of who their customers are so they can change their prices. Most of the time, this means putting people into either the “leisure” or “business” group. And the way prices are set for each group is very different. The simplest answer is that prices for leisure routes start high and go down as the departure date gets closer, while prices for business routes go from high to low as the departure date gets closer. This is easy to see if you look at last-minute short-haul fares between business cities.
Fuel is a big part of how much it costs to fly, so prices have to be high enough to cover this. Airlines often sell tickets months in advance, so they need to keep an eye on how prices change and try to guess what they will cost in the future.
You can also see what this means by looking at “fuel surcharges.” Many airlines added these extra fees to tickets because prices of fuel have been going up over the past few years.
Follow our blog for more interesting stories.