It’s not easy to fight back against the powerful algorithms that airlines use for dynamic flight pricing – but it is possible.
Airlines have evolved beyond simple supply and demand models. Prices of plane tickets often change daily in the run up to take off. Special events, days of the week and individual customer profiles matter. Data scientists use pricing at competing airlines and the flexibility of tickets to fine tune their models.
Fighting back against dynamic flight pricing starts with being aware of the game being played by the airlines.
Once you know what they are doing – you can adjust to get the best possible fares.
Supply and Demand: The Core of Dynamic Flight Pricing
Good old-fashioned supply and demand are the starting point for airlines in their dynamic pricing models.
If you have booked flights just before the Christmas holidays, or when schools break up for the summer, the brutal increase in the cost of seats will be all too obvious.
Supply and demand factors change as the date of the flight approaches.
Why Last-Minute Flights are Super-Expensive
Book a few days before take-off, and these factors come into play:
- Fewer seats are left (supply is lower).
- Last minute business travellers are not price sensitive.
- Additional demand from family emergencies and the like.
Other Dynamic Airfare Pricing Factors
If it were only supply and demand, competition and costs would form some kind of equilibrium. Pricing would become smoothed out over time. Mathematically minded people might know this as a NASH equilibrium.
Here are some other factors:
- Customer Data / Behaviour: Airlines use complex data analytics to understand customer behaviour. Your booking history, flight preferences, and even the type of device used for booking can influence the price of your ticket.
- Competitor Pricing: Airlines also adjust their prices in response to the pricing strategies of their competitors. New competitors entering a market can be a positive from the perspective of travellers. Conversely, airlines going bust (or stopping a route) can boost demand and so prices for the remaining carriers.
- Special Events / Seasonality: Prices can increase during peak travel seasons, bank holidays, or around special events when more people are likely to travel. Trips costing up to 2x during the school holidays is no coincidence!
- Route Popularity: Popular routes tend to have higher prices due to increased demand. Fashions for destinations changes over time – and the latest trending hotspot may have limited supply.
How to Outsmart Dynamic Flight Pricing?
While you won’t always be able to get the best airfares for your trip, there are ways to keep the cost down.
Here are my top tips:
- Check Cheap Flight Spotter Websites: I check sites including Secret Flying, Premium-Flights, and others regularly (no affiliation with them). There are also e-mail based services which spot and distribute bargains – for example Skip’s Luxury Flights club.
- Book in Advance: The sweet spot for international flights is 2 to 8 months before take-off. Short-haul trips are cheapest one to three months before departure.
- Midweek Departures: Tuesdays and Wednesdays are cheaper as a rule, though it depends on the destination. Business-class tickets are frequently cheaper at weekends.
- Flexible Departures: Many flight searching sites, such as Google Flights, show fares on a weekly or monthly calendar. If you can be flexible, you can pick the cheapest fare.
- Alternative Airports: While not always possible, many destinations have multiple airports. Research transport to your final destination before you book.
- Go Incognito: Clear those cookies or use an incognito browser window to stop the airlines tracking you and boosting the price based on your searches.
- Flexibility of Carrier: Don’t get married to one airline. Competition is fierce between carriers, and it pays to shop around.
- Points and Special Offers: Loyalty programmes from airlines have pros and cons. You give the airlines a lot more data to factor into their dynamic pricing models. On the other hand, those points or discounts add up. A discount or seat upgrade offer can take the sting out of a dynamically priced fare.
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