How Airfares Work

How Airfares Work?

How Airfares Work

Discovering the way that airlines and travel agents charge for flights is the key to finding the cheapest flights. Top that that with some thorough research and you could potentially save hundreds.

In this article I have split it into a couple of sub-categories which are; Supply and demand, seasonality, stop-over and connection tips and open jaws. I will teach you how all this works and how you can reduce the cost of your flight with this knowledge.

In the following Article I will cover the rules of the airfare and other travel requirements that you should always check before purchasing your ticket. I have put this in a separate article as those tips will help protect you against fees.

But the very first thing to do is, to determine when you intend to travel. Does it have to be date or even month?

The answer will depend of course what your plans are at the destination. If you are flying over a wedding, for example, then your dates are a little more restricted.

However would you fly a day earlier if it saved you a hundred dollars? I know I would.

Supply and Demand

Have you ever boarded a flight and spoke to the person next to you and found out that they paid considerably less than you?

Seems odd, since there seat is in the same section of the plane and they have no extra benefits that you can tell. Well that’s how supply and demand works.

Airline use the supply and demand method, much like most businesses however with airlines it is based off the availability of remaining seats.

On an international flight the majority of airlines will have their supply and demand model based on 9 seats per price, known as a booking class. Domestic or Intraregional airlines typically use 4 seats; however each airline is different both internationally and domestically.

To explain the above method of pricing we will use an example of the lowest possible fare/booking class as $1,000 for a flight to Los Angeles on United Airways

United Airways has 90 available seats and would charge a $1,000 for the first 9 seats available and will sell these fairly quickly… let’s say that a family of 5 and a family of 4 booked this the day the fare was released.

So the first 9 seats are now sold, the next 9 seats will now pay $1,200, an extra $200 just for being the 10th passenger. Once this lot has sold the next 9 might be $1,300 and the next 9 at $1,500 and so on until they reach their maximum price.

Starting to make sense?

So out of the 90 available seats what happens to the last few seats? Well the flight is almost full, so the airline will charge its highest price.

This could be $3,000 as an example which is an extra $2,000 more than the fare was originally worth. Trust me when I say ‘$2,000 extra is not an exaggerated inflation’, I’ve seen it.

You’re probably thinking ‘how do you I around this? The tip is to be flexible with the date.

For domestic or Intra-Regional flights, think about when most people are travelling.
Many people have weekend getaways or events they need to get to on the weekends, leaving in the evening on a Friday or sometimes even a Saturday morning and returning late Sunday or early Monday.

This means that if you want a weekend getaway you’re better off getting a midday or morning flight on the Friday and retuning earlier on the Sunday or later on the Monday.

The reason why it would be cheaper is simply because there are less people booked on that flight.

For the weekend travellers, these people probably have an event, like a wedding or something similar. So they probably booked their flight months in advance. In the supply and demand method, maybe they have already sold 80% of their seats… therefore you are in the highest 20% category.

If you left at a different time, the airline may have only sold just a few seats meaning you get a much cheaper price. You could even leave mid-week to get an even cheaper flight and return Saturday or another weekday. Whatever suits your preferences and needs for travel.

On a normal week, there just isn’t as much demand for the flight during the middle of the week. It’s usually just international tourists looking for those cheaper flights and sometimes workers for their mid week training sessions.

Monday mornings and sometimes Tuesday mornings are also busy domestically and this is because of the work travellers.

Some people’s jobs take them on domestic trips all the time, any time of the week but the majority are in the morning and are usually towards the beginning of the week. On these days look for the flights that arrive after 9am or book on Wednesday or Thursday.

Internationally works a little differently as people travel for so many different reasons and there are usually a few choices of airlines providing very different routes.
Therefore some research may be required to find the best price and airline.

The best thing to do is go to a comparison site online. One of the best is Zulu and Expedia which have quite a good visual presentation of the airlines and prices on each date.

Try it for yourself, do it as a practice run, go to the site and type in dates and destination information, as well as make sure the flexible dates box is selected.

It will then bring up a grid with the downward menu showing ‘from date’ and the horizontal field showing the ‘to date’. Now you can see what airlines are the cheapest on each day and what to and from date combination is the best.

may come up as $3,000 but if you ticked the flexible date option you might find that if you bring one of your legs forward or backward a day or 2, you might end up paying 2,500. In this scenario you would have saving you $500.

The same principle works on either departure or return flight or by a combination of both. This also applies to even further dates, maybe a week later; this may only cost $1,500 instead of the original $3,000.

The visual table on a comparison website will also show you if the season has possibly changed. If you see a flight in one week’s period for a $1,000 and the following week prices are mostly $3,000… then chances are the season has changed from low to high.

So in short, flexibility is the key to cheaper flights, it may not be the exact travel date you planned to depart or return, but if it puts money in your pocket then all the better for your holiday.

Keep in mind however that going a few days prior to your planned date does mean that you may need accommodation for those extra nights. If the saving on the flight is higher than the accommodation you would need to pay then you have already saved money.

If it’s around the same price… then you just scored a few extra days at your destination without any or at least minimal costs.

On the flip side to that if you aren’t really saving much at all due to a very busy time of year and the accommodation ends up pricey (usually for the same reason)… then it may just be best to leave on your planned date.

Just remember that flexibility is the key and I urge you to experiment with different dates and combinations on both legs. You will definitely see a price difference.
Sometimes large, sometime small, but any savings is a bonus.

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