Ever wondered why flight prices go up and down like a roller-coaster? We’re pretty sure that question has crossed your mind at least once. In this article, we’re going to reveal the science behind flight pricing.
So say you wanted to travel and experience El Nido last May? You’ve checked the flight prices and schedules, filed your leave, freed up your date, and blocked your dates.
A couple of days later, you finally decided to book your flights to El Nido. You search for the same flight, but lo and behold, the prices have doubled. Yikes!
So what happened? Why did these flight prices skyrocket? Read on to understand when and why flight prices change.
Why do flight prices change?
Some common misconceptions around price fluctuations is that prices change based on the number of searches you do for a flight. Some people even recommend that you search for flights while in incognito mode so that websites can’t change the price based on your searches.
So is there any truth to this? To shed some light on the science behind flight pricing, we interviewed Skyscanner’s Principal Product Manager, Alex Astafiev, to unveil this mystery.
The truth is, these changes in prices are the way airline companies react to sales as well as external factors to try filling their planes. Like stock prices, flight prices are actually affected by the number of sales, and not by the search numbers.
In other words, it doesn’t matter how many times you hit refresh or search a particular route. Even if you hit refresh a thousand times, flight prices won’t change unless more people buy the same flight.
The reason people think refreshing affects prices is because during a huge seat sale a flight you’re checking might get more expensive the longer it takes for you to make a purchase. The simple reason for that is that during a big promotion, thousands of people are buying various flights at the same time which is driving up prices in real time.
How do I know I’m getting a good deal?
There’s only one way to find out if you’re getting a great deal for a flight. And, that’s to determine the average flight prices for that particular route and for that particular month or season.
Even before you commit or book a flight, familiarize yourself with the typical and average flight prices for the route you’re checking. When you see a flight price that seems a whole lot cheaper than usual, be ready to grab that ticket.
Before you book, be sure to decide on a price range that you are comfortable with. And, if a specific ticket is beyond your budget and reach, look for alternative routes and dates to find a rate that perfectly suits you.
You can monitor prices of your preferred route with ease, thanks to our Price Alerts feature. So, make sure to set one up for your preferred route, and we’ll keep an eye on it just for you.
Before booking a flight, take note of the following:
- Going incognito while looking for affordable flight prices online won’t help you save a peso! Contrary to popular belief, airline websites don’t use cookies to shift flight prices for particular customers.
- Flight prices are more likely to increase as you get closer to your departure date. As they say, the early bird catches the worm. While that’s not always the case, airline companies and their pricing game plan will protect a few seats for any “late availability” booking. This is mainly designed to cater to last-minute business travelers who have to fly at a specific place at a specific time, and are willing to pay premium prices to do so.
- The day you book your ticket can affect the price you’re going to pay. Keep in mind that a high and fruitful sales day for an airline can drive flight prices up, especially if tons of bookings are made. But, there are plenty of permutations and algorithms that go into flight pricing, depending on the demand for that route, the number of seats, plane, and many more.
- Flight prices are always changing. They go down and they go up. Simple as that!
How do airline companies regulate flight prices?
Airline companies have two main goals. First, airlines want to fill their plane. Second, they want to fill their aircrafts in a rather profitable way. To achieve their goals, airline companies have to control their flight prices through a process they call “yield management”.
Airline companies allocate different ticket price levels (also known as “buckets”) on each flight. Remember those 400-peso flights to Boracay? Yep, these deals really do exist, but there are likely only a few seats available on a flight for that kind of price. And, once these seats are all purchased, tickets will be automatically moved to the next (and higher) pricing level.
Also, airline companies adjust their “buckets” accordingly, depending on the month or season. Remember, they know which plane seats sell best at specific times of the year (like the summer months). And, they also know when it’s more challenging to sell airline tickets (like rainy season to Batanes).
Clearly, you’ll find more bargains during the low travel seasons and fewer during the popular flying times.
3 must-know yield management golden rules
- Flight pricing strategy. Airlines based their flight prices on their customer needs. Tourists can afford to plan their getaways, and book months prior to the departure day, to secure a bargained deal. Business travelers, on the other hand, are most likely to book airline tickets closer to their departure date, meaning they have to pay the full fare.
- Availability control. Airline companies control the availability of specific seats based on their historical data. That’s how they determine how many plane tickets will be available at rock-bottom rates.
- Inventory control. Airline companies control their seats as well as the seat allocations offered at particular rates at any given time. They call this process “control of inventory” and is practiced to maximize their profits on every flight.
Why do flight prices differ between Online Travel Agents (OTAs) and airlines?
- OTAs negotiate flight prices with airlines and essentially have sales agreements, committing to deliver certain volume sales.
- OTAs can undercut airline prices by a particular amount (sometimes as low as PHP 40), to attract a customer and get a chance to offer their other services, like car rentals and hotel bookings.
- OTAs may, often, commit to a flight price that they’ve displayed even if the actual rate has changed. As a matter of fact, some of them wouldn’t change the price, even when others have shown updated flight prices.
When’s the best time to book a flight?
With less human interference and more automation in yield management, recent research shows that it makes pretty little difference on which day of the week you’re going to buy your ticket. As studies have confirmed, flight prices vary by about 1 percent across the week.
Generally we recommend you book 5-6 months before a flight to get the best deals. You can also use our Search Everywhere feature set to the Cheapest Month.
How to score cheap flights? And, how can Skyscanner help you do that?
Looking for cheap flight prices to your dream destination? Well, you’re in luck, as we’ve built a smorgasbord of tools and techniques to help you find great deals. Just take note, though, that airline companies optimize their algorithm and pricing strategy all the time. Besides the good old trial and error strategy, we also have a few cool techniques that you can adopt.
1. Determine what flight price is best for you
Once you’ve figured out what the average flight price is, you’re basically all set. If, however, you’re planning to travel to a popular day or month, the average flight price will certainly change. Furthermore, don’t forget to set a price range that you are comfortable paying. Afterwards, wait until the flight prices go down or up.
2. Monitor the prices using Skyscanner Price Alerts
We know how busy you are. That’s why we’ve made things a whole lot easier and simpler on your end. After you’ve determined your price range, set up a price alert with Skyscanner, and wait until the flight prices change. Yep, it’s that simple!
3. Be flexible
Flexibility is one of the keys to scoring cheap flight prices. And, when we say flexible, we mean that you’re open to the idea of going to a different destination, traveling on non-peak date and having more connecting flights. Speaking of which, we also mean that you should be flexible, when it comes to the departure and arrival times.
And, by the way, we have a handful of travel tools to help you become flexible with your flights, including Multi-City Search, Everywhere Search and Cheapest Month tool.
4. Know how important your time is
With Price Alerts, you won’t have to spend hours in front of your laptop, waiting for affordable flight prices to drop on your computer. Nevertheless, Alex says he does not spend too much time waiting for the perfect deal. When he sees the flight price is at the lower end of his set range, he’ll book that ticket in an instant.
It’s just like when you’re buying groceries, and you saw that your favorite biscuit is 10 pesos cheaper at another supermarket, but will require 30-minute jeepney ride. Would you still spend a ton of time to go there just to save a few bucks? I don’t think so.
At Skyscanner, we spend countless of hours optimizing our travel search engine and building a bunch of tools, to help you save a fortune for your trip!
