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Air Fares 101 – Why do fares change all the time?

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Re: Air Fares 101 – Why do fares change all the time?

#91

Post by jusben1369 »

michaelochurch wrote: post #3

"We did that Uber shit before it was cool." -- The airlines. Another thing that surprises most people is how expensive business and first class are, relative to coach. After all, if you're only getting 1.5-2x as much space, it doesn't seem fair that you'd have to pay 10x prices. The truth is that many of those seats are filled via upgrades to frequent fliers and more fairly priced in that view. But someone who asks f…

I wonder if we're confusing cause and effect here. Are half of those first class seats upgrades because they couldn't be sold? Or are they priced at such an exorbitant price and manipulated to ensure half remain free to reward high revenue frequent fliers? You seem to be implying the latter.

Re: Air Fares 101 – Why do fares change all the time?

#92

Post by saosebastiao »

There is a big problem with trying to game the system with the airlines: The pricing is done using control theory. In fact, they have the most mature application of control theory to pricing out there, probably by virtue of being to first to apply it in that way.

Practically, that means that you can only game the system if nobody else knows how. If you are the only one that knows how, the algorithms probably can't detect and compensate for the error. As soon as news breaks out, the algorithm starts compensating. We saw this about 10 years ago when there were a few companies that started promoting the ability to search for Y-class fares...it was all but a year or so before the pricing stabilized. The same problem is currently happening for the hidden-city ticketing trick [1](the algorithms are compensating, although the airlines put in some manual systems when it first broke news).

The same goes for these ideas of "the best time to buy". Not only is historical data not good enough, but the more well known the data becomes, the worse the predictions become. This has already happened to some degree with the "buy as early as possible" crowd. Now it is more expensive to buy early than it is to buy late...something that wasn't previously true.

The lesson? If you figure out a way to game the system, don't tell anyone else.

[1] http://www.wsj.com/articles/SB100014241278873235398045782597...

Re: Air Fares 101 – Why do fares change all the time?

#93

Post by jusben1369 »

thedufer wrote: post #86
canvia wrote: post #45

Earlier quoted context omitted.

You sure about that? http://www.rita.dot.gov/bts/airfares/programs/economics_and_... That shows 2014 has the highest CPI adjusted price since 2003 and the highest raw USD price going back as far as the data (1995).

That's a deeply misleading summary of the data. The table excluding inflation is meaningless in the context of parent's comment, so I won't even touch that. Real prices have dropped 14% in the past 19 years, and have been basically flat since 2004, except for an obviously anomalous dip during the financial crisis (2009/2010). The prevailing trend lines are a steady drop of 1.7% per year from 1995-2004 and then a flat…

Airfares are most definitely higher than they were in the mid 2000's. The global recession saw a big cut back in capacity and that capacity hasn't been added back in to the system to offset the ever stronger economy. Flights are fuller than they've been in a long time meaning higher fares etc.

Re: Air Fares 101 – Why do fares change all the time?

#94

Post by jusben1369 »

shampine wrote: post #66
gcb0 wrote: post #44

Earlier quoted context omitted.

it's not cheap because the system works. it's cheaper because more and more jobs require constant travel so they have much more of the good predative revenue. for example at work I've never seen a 300 mile trip for less than 350. ever. let alone the la-Chicago for 100 they mention in the article. that would look like a bug in my employee's booking system. what they get from the rest is just icing. so, convince yourse…

I just looked at round trip tickets LAX->RDU for $329 on a direct flight. Flying is cheap.

How far ahead and what days are you traveling and how many days apart is your start and return trip. I fly RDU -> SFO regularly. If I'm 21 days out and my trip is 3 days or more I can get it for $500 - $600. If I reduce it to 2 nights it goes up to nearly $1000. So "cheap" tickets still exist but they're much harder to find than they used to be.

Re: Air Fares 101 – Why do fares change all the time?

#95

Post by avar »

Someone1234 wrote: post #67
ElComradio wrote: post #60

Earlier quoted context omitted.

Then what happens is you effectively impose a surcharge on the 90% of the population who do not need a larger seat pitch, which hardly seems fair either. You don't have competition on seat pitch because there are not enough people willing to pay the increase for the comfort to sustain an airline.

Older people and disabled people make up a measured percentage as well. So less than 90%. Additionally everyone benefits from more seat pitch, even if just to allow them to more easily use things like a laptop in economy (which is not viable now if the person in front of you reclines fully). > You don't have competition on seat pitch because there are not enough people willing to pay the increase for the comfort to s…

    > Older people and disabled people make up a measured percentage
    > as well. So less than 90%.
How does being older have anything to do with needing more leg room? Depending on the disability that may not matter either.

    > Additionally everyone benefits from more seat pitch
As an anecdote I'm 183 cm (or 6") and I actually find it really uncomfortable to sit at the optional incline offered by airlines, I'd like to either be sitting straight up or lie completely level, nothing in-between. So I'm not benefiting from it, unless it's getting quite close to 90 degrees.

    > It has nothing to do with "comfort. [...] It is what people need
    > so they aren't in physical pain for the duration of the flight.
I'm relatively fine with the current seat arrangement, and I'm happy that airlines aren't being mandated to increase prices for everyone due to some government-imposed seat size regulations.

I'm happy that I have the option to choose airlines like EasyJet for shorter trips which are essentially glorified cattle carts with wings on them, but which would allow me to affordably go somewhere over a weekend. If I want more seat space there's always something like KLM's Economy+, or other similar premium arrangements.

    > If airlines want to save some money, remove recline completely.
Aside from the fact that you're entering into a voluntary business arrangement with the airline, and it's somewhat presumptuous to assume that you're better aware of how they could save money than they are:

When you're sitting down in a chair your upper body isn't taking up volume in the space going up vertically from your knees, so there's space for the seat in front of you to recline into that space.

So this suggestion doesn't make sense. It's not an either-or, maybe airlines would benefit from removing or reducing recline, but that's not mutually exclusive with saving money by reducing the space between seats.

Re: Air Fares 101 – Why do fares change all the time?

#96

Post by lifeisstillgood »

I think the absolute dynamic pricing is what annoys me - it's like an inverse Lake Woebegone effect - simply everyone who gets on a plane assumes that they overpaid.

I suspect there is somewhere in the behavioural economics literature a pricing mechanism that has many benefits of dynamic pricing but allows the buyer to feel I control - they know the complete range of fares and the complete range of prices and so feel able to buy without the fear if missin out.

Re: Air Fares 101 – Why do fares change all the time?

#97

Post by eitally »

encoderer wrote: post #33
kxo wrote: post #30

Earlier quoted context omitted.

> If you could really get in for $50 a day, you could easily eat and drink that much worth. Or just get an American Express card (Platinum, ideally - no additional fees) and net access to the Centurion lounge and all Delta lounges (when flying Delta). The Centurion lounge is second-to-none domestically, and the Delta lounges aren't half-bad when it comes to the free booze (some are self-serve - Jack Daniels, Grey Goo…

That card is $400 a year. And they haven't reduced the fee even while losing Continental lounges when it was bought by United. For my money, the Citi AAdvantage Executive card is a better similar card, because it now gives you access to all AA and USAirways lounges. While you're right that in my experience the Delta lounges are better (the only amex lounge I've been to is at mccarran), what matters most to me is a lo…

But on the other hand, with that $400 you also get free Global Entry & PreCheck, $200 of airline incidentals per year (in-air food, baggage overages, upgrades, whatever), unlimited free companion tickets when you purchase tickets for yourself via their concierge service, free gold/elite status with most major car rental and hotel chains, and whatever other non-travel benefits there are. For frequent travelers it can pretty easily pay for itself.

Re: Air Fares 101 – Why do fares change all the time?

#98

Post by xrjn »

manacit wrote: post #11
rspeer wrote: post #4

I was hoping for something that explained the part where they get you to pay a higher fare by tracking you on the Web. But maybe an insider site like this wouldn't be willing to talk about that. There are many sites that describe this happening, such as [1]. And I've seen it happen to me: a fare would go up by $50 while I was searching, and opening a private browsing window would make it go back down. [1] http://www.…

I don't mean to sound standoffish, but as far as I know this isn't true. I have yet to see real proof that airline companies get you to pay a higher fare by tracking your searches/browsing. While I'm sure you saw a $50 difference, it was likely a slightly different search, which is almost always what happens when people claim they've noticed this. About a year ago, someone on reddit went out and offered a year of red…

A couple of weeks ago I were searching for a flight on Easyjet with a friend, and every time we searched for the flight, we got a different price. We tried from incognito, tor and from a phone. Most of the differences were in the cents or at most a few euro, for a 45€ flight.

Re: Air Fares 101 – Why do fares change all the time?

#99

Post by drblast »

saosebastiao wrote: post #87
zrail wrote: post #26

Southwest, as far as I can tell, doesn't change rates once they've published. Three rate tiers, optional early check-in to get a better boarding order position, and free baggage. The most striking difference is that, in general, the flight attendants are happy . They smile. They joke around. Sometimes they sing songs. I was on a flight a few months ago where the entire plane played a game because it was someone's bir…

Additionally, they have the best leg room of any economy class that I've ever experienced.

SW is great for all the reasons mentioned, but Jet Blue's leg room is amazing.

I'll only fly either of those two airlines if I have a choice.

Re: Air Fares 101 – Why do fares change all the time?

#100

Post by dmdeller »

Someone1234 wrote: post #81
thaumasiotes wrote: post #70

Earlier quoted context omitted.

Try to buy an apple in California and see whether the sales tax was included in the price ;) I have a two-part theory as to the advertising of prices exclusive of sales tax (which, again, doesn't apply to the apple example, for those HN readers who live in Silicon Valley); it goes like this: 1. Companies that sell products out of more than one store would like to use the same advertising everywhere, instead of making…

> is something I've never heard of. All of my US cell phone plans advertised the exact price they charged. Like hell they are. Here's a 1:1 copy/paste from a recent AT&T bill (only modified for formatting, and for privacy reasons): Surcharges & Fees Administrative Fee $0.61 Computer Aided Dispatch Surcharge $0.06 Federal Universal Service Charge $0.82 Municipal License Surcharge $0.59 Regulatory Cost Recovery Charge…

Prepaid plans across all US carriers generally have all taxes and fees included in the advertised price, except for standard sales tax (if your state/locality normally charges it).
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