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

cheapair.com

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

#151

Post by naraghi »

saosebastiao wrote: post #92

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 de…

I'm really interested in how these ways to game the system spread throughout a given market. I've referred to it as the "psychology of markets" and heard it called "behavioral economics." Could you recommend any other sources to read more?

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

#152

Post by saganus »

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…

This sounds like this would be fertile grounds for an airline to be disruptive.

Imagine what would happen if there was an airline that could set fixed prices for, let's say, the next 2 or 4 weeks. So you can search for a ticket price on the 1st of a month and it would be the same as on the last day of the month.

I know that this is probably not realistic since you can't just open up an airline like you can a startup, but it would be interesting if it was possible and see who gets a bigger revenue/piece of the pie: the airlines with the uber-sophisticated yield management systems, or the one that treats customers as people and not factors in an equation.

It's probably very difficult to even do the mental experiment, but I sure would be glad to see these kind of companies show up. I know there are already lots of companies that treat customers as their most valued asset instead of just a cash-cow, and almost in all cases that I can think of, these companies are doing great precisely because there's more and more people that want to be treated like people, and are willing to pay extra for that, instead of getting the lowest price and be kicked in the behind in the process.

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

#153

Post by npizzolato »

mikeash wrote: post #130
npizzolato wrote: post #127

Earlier quoted context omitted.

Even if that's true, that would ignore all the new fees for services you used to get for free. Some new fees you now have the pleasure of paying: - Fee to check even one bag. You used to be able to check at least one under a certain size for free. - Fee to pick reasonable seats on many flights. Those isle and window seats are available, and they can be yours for only $10! - Fee to board at a reasonable time. Otherwis…

"Fee to check even one bag" means that people traveling with small amounts of luggage can pay less. "Fee to pick reasonable seats" means that people who prefer a lower price can pay less in exchange for getting worse seats, while people who insist on better seats have to pay. "Fee to board at a reasonable time" either means that people with more carry-on luggage pay more, or it means that people who don't understand…

> "Fee to check even one bag" means that people traveling with small amounts of luggage can pay less.

"Pay less" is how the airlines would like to phrase it, but as a consumer I care more about the comparison to what I paid yesterday. And today, if you're not paying for those services, you're actually paying the same amount that you used to. They're just charging other people more.

It's not like the prices went down when they converted these previously-free services into paid services. They just decided to start charging extra for something they used to give away for free and are busy enjoying the extra profit.

Sure, they're a business and they can charge whatever they want for whatever they want. But don't try and spin it as a win for the consumer so they can choose to pay less.

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

#155

Post by dasil003 »

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…

Your threshold for proof is too high. We're not talking about physics here, these aren't immutable laws to be scientifically investigated, these are systems designed by humans. The wise thing to do is assume they will do anything to screw you until proven otherwise, not the other way around.

Personally I don't search airline tickets outside of incognito , and preferably not without VPN or tor protection as well.

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

#156

Post by coldcode »

giarc wrote: post #27
coldcode wrote: post #2

Good overview. Having worked at a GDS subsidiary and written about this topic, another thing to add is it depends on how many caches there are between you and the root database. Airfares are heavily cached so the data that is shown in search results is often stale; only the final booking (when you actually pay) is the real number. The more contention for seats as you get to the last few the more likely the final pric…

Great explanation, however why do I never see "Your fare has increased $55" on sites like Expedia but sites like CheapAir.com have it all the time. I expect Expedia and CheapAir.com have the same source of data therefore it does seem like a bait and switch situation.

Expedia may decide to eat the difference (it can go up and down) and other folks may not be able to afford this (remember that airlines only give like $10 per ticket, not much margin).

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

#157

Post by coldcode »

pbreit wrote: post #154

An article like this needs to at least mention that the relatively unsophisticated pricing approach by Southwest has led it to generally outperform the rest of its competition for decades (I know, staying out of bankruptcy is not a very high bar).

Since their fares are not comparable since they don't let anyone show theirs in the same list as other airlines, you really cannot know if they are cheaper or not. In reality this means they are able to set their prices on average higher than those who have to compete in a list. Better control vs. more exposure.

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

#158

Post by eru »

rbcgerard wrote: post #41
jexe wrote: post #20

So has anyone built a site that lets you put limit orders on airline seats yet? I'd love to, say, have something automatically book a $250 flight across the country if the price happens to cross that threshold in the next week.

I think that's a pretty good idea - two quick thoughts: 1.as a consumer its hard to do more than "technical analysis" on a chart of the ticket price to figure out where to set your limit order 2. What are the odds that the company doing this doesn't share their order book with the airlines? still like the idea

> 1.as a consumer its hard to do more than "technical analysis" on a chart of the ticket price to figure out where to set your limit order

You don't do any analysis on the price. You just introspect, and figure out what is cheap enough to make you get up and fly, and that's the price you set.

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

#159

Post by oostevo »

ExpertFlyer wrote: post #150

What no one is telling you is that the actual published fare tariffs don't change that often. What does change and is dynamically managed by the airlines revenue management departments is the availability of different fare classes that the tariffs book into. It's the combination of fares and fare class availability that determine the current fares available for a flight (and not just the lowest fare). On ExpertFlyer,…

In case it helps:

I've been a subscriber for several years, and this is the first I've seen the Education Guide. It might just be because I'm oblivious, but perhaps you might want to make it more prominent on the "New to ExpertFlyer" page?

I've learned everything in there by osmosis at this point, but the strategies would have been a cool thing to know when I was getting started.

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

#160

Post by eru »

pacofvf wrote: post #119
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.…

1. search a flight. 2. search it again. 3. the price has surged. they don't track individual users, they track the search queries, this makes me wonder if flight search services are just rising the entire market prices, instead of a user only searching once, they constantly search the same query.

> [...] this makes me wonder if flight search services are just rising the entire market prices, [...]

Not in general. The airlines account for that. (Otherwise, if the market could bear a higher price and still get reasonable demand, the airlines would have raised prices to that level in the first place.)

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