Have you ever wondered why airfares fluctuate so much? Or why the person sitting next to you on a flight paid half the price you did for the same seat? We explain why.
Airlines price their seats with a supply and demand model. In simple terms, this means the more demand there is for a flight, the higher the fares may be.
For an airline to maximise revenues, peak times of the day or busy travel times of the year may see higher prices, as the demand for travel is greater.
As the aircraft starts to fill its seats, the prices start to climb. To secure the lowest fare, the more notice you can give to book, the better chance of securing a lower priced deal.
Here are a few key points in how an airline sells their seats, and how you can snag the lowest fare.
Fare Buckets
This is an airline term for the prices attached to each seat. As every seat is a tradeable commodity to an airline, their goal is obviously to fill every flight.
Pricing can be complex and dynamic and change any time of day. Think of an aircraft with 300 seats onboard. Each of these are divided into fare buckets with a price attached. Once the lowest fare bucket has been sold, it bumps up to the next higher fare bucket and so forth until the flight is sold out.
Sometimes they do not sell as quickly as the airline anticipates, so sale fares and a last minute drop in prices can occur.
Conversely, if the seats are selling too quickly or it’s a peak time of travel, the lower fare buckets may not be offered, as the airline’s algorithms predict the seats will sell.
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Best Days to Fly
For domestic flights, generally the best times to fly are:
- Middle of the day
- First flight in the morning, or last flight in the evening
- Tuesday and Wednesday are often cheaper days to fly, as are Saturday afternoons
- Other times business travellers are not filling the seats
The peak times to fly can vary:
- Morning and early evening flights during business travel hours
- Sunday evening, Monday morning and Friday evening
- Public holidays (generally plus a day either side)
- Christmas holidays (particularly between Christmas and new year and first week of January)
- School holidays (these vary by state, so check when the dates fall)
International flights are not as volatile as domestic, although peak travel times are generally the same. Winter in the northern hemisphere can be the cheaper time of year to fly with fewer tourists, but some destinations can be peak time such as ski season and Christmas.
If you’re flexible with your dates of travel, ask your travel consultant to look at a few days either side to ensure you can find the lowest fare.
Cheaper is not always better
The adage “you get what you pay for” can relate to airfares too. Sometimes the lowest fares may come with restrictions such as no checked baggage, no refunds or higher fees to change or cancel.
If flying on low-cost airlines such as Jetstar, Scoot or Air AsiaX, there may be restrictions you need to know at the time of booking. Ensure you know what your fare has included, and if any extras need to be purchased at time of booking like seat assignments or meals.
