Tuesday, January 15, 2013

Why Do Airfares Fluctuate So Drastically?

How airlines price their fares

Dynamic Pricing in the Airline Industry

A layman's definition of "dynamic pricing"
Dynamic pricing

— otherwise known as revenue management, progressive pricing or the computerized art of changing a ticket price over time based on actual supply and demand

Delta right now has an airfare sale from Atlanta to Aruba ending April 30, 2013
$430.40 > 45 days (sale pricing)
$376.40 < 45 days prior (sale pricing)
$460.40 sale period black out dates for Easter
$422.40 off season June non-sale pricing

This past July, for tickets purchased approximately 37 days in advance, our fares were $453.40.

IF I used the theory to wait until < 45 days prior to departure, for a flight this coming June, 5 months out, I would pay MORE for tickets than our flights last July. But, if I wanted to fly during President's week in February, much less than 45 days out, the Delta fare is presently $1053.80. Air Tran who is running the same sale as Delta is presently $739.40 for the same dates.

I have said before and will say it again, buy your tickets when you are comfortable with the price, and do not look back. That is unless you fly Jet Blue and then you will be at your computer at least once a day checking to see if the "dynamic pricing" has brought the fare down.

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