Why Do Airline Prices Change So Much?

It can be quite frustrating when trying to buy plane tickets to find low fares only to see them vanish overnight. Ticket prices can fluctuate by hundreds of dollars from day to day, and predicting the change can seem virtually impossible, leaving many consumers to simply buy whatever ticket they need at the time. There is a logic to these changes, however, although so many factors go into determining the shifts that it can be difficult to predict when the lowest fares will be available.

Airlines look at two main types of consumers: early purchasers and last-minute purchasers. An early purchaser generally can wait some time to find the best deal on a flight, but often will simply buy a relatively affordable ticket, since predicting when the lowest price point is can be too difficult. Last-minute purchasers often pay full price for a ticket and do not have the flexibility of waiting for cheaper deals. As a result, prices will tend to spike radically within a few days of a flight, since airlines know some consumers have no other option.

Airlines always are trying to maximize their profit based on the forecast demand for a destination. As long as their predictions do not change, prices typically will not change until immediately before the travel date. Occasionally, however, a destination’s popularity will increase drastically for some reason – a write-up in a national magazine, a big event, or from some other cause. When this happens, airlines might predict increased demand and raise their prices accordingly.

The major factor in determining airline prices is whether an airline believes it will be able to fill all of their seats. If there is a long lag in sales, resulting in a flight still being well below occupancy as the departure approaches, prices might undergo a major dip. Conversely, if there is a spike in sales for some reason, and the flight begins to fill up, prices will increase.

Economic realities, airline mergers and global events can sometimes cause aircraft to be removed from service. When this happens, overall capacity for a route is reduced, leaving fewer seats to be filled. Airlines will thus suspect that flights will be fuller and will increase ticket prices.

With so many variables, it is very difficult to predict when when tickets for a particular flight will be at their lowest price, but analyzing historical data can yield some trends. A number of services, such as the online site Yapta, show historical price data for a specific flight date, displaying what the ticket prices were on each day leading up to the flight. This allows consumers to make more informed decisions as to when they should purchase their tickets.