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Why does Airfare Pricing change?

airfare pricing

It can be frustrating to look at airfare only to find out a day later (or even an hour!) that the price has changed.  Airfare can fluctuate by a few dollars up to several hundred dollars in a matter of hours.  I cannot predict when pricing will change nor can I predict the day that will be the best to buy airfare.  From years in the travel industry here are some of the known factors that go into price fluctuation:

 

Time of Year

It will always be more expensive to fly over the major holidays, like Thanksgiving and Christmas.  The airlines know that several thousand people travel during this time of year and they take advantage of this opportunity.

 

Popularity of Destination

Have you ever wondered why it can be more expensive to fly to the beach in the summer? Families travel most often during the summer because kids are out of school.  Summer weddings drive honeymooners to the beach looking for relaxation and romance.  Is there an event that is happening in a popular city?  You can bet that airfare will be higher as the airlines predict an increase in traffic to popular destinations.

 

Same Seat, Different Fares?

Airlines have computer programs that are constantly monitoring flights, analyzing booking patterns, and in real-time changing the number of seats available at each airfare level.  If a flight is booking up faster than expected, an airline may decrease the number of seats available at some of their lowest fare levels, or wipe them all out altogether.  If a flight is not selling well, suddenly more seats may appear at fare levels that were previously “sold out”.

The same system might say “Uh-oh, we have way too many empty seats” and decide to open the lower fare levels back up.  This process happens continuously until hours before departure.  Gradually, fares on a particular flight will get higher and higher as more and more seats gets booked and more and more fare levels get closed.

 

A real-life example:  I am currently working with a group of 4 going to New Zealand.  2 days ago round-trip airfare from LAX to Auckland was $1463/pp.  Today airfare is $1963/pp.  Could airfare change again?  Sure – it could continue to increase or it could decrease.  Or it could stay the same.  My suggestion is always this:  If you know you want to travel then buy the airfare as soon as possible.  The closer you get to your departure the more the ticket is going to cost.

Questions about how I work with my clients and their custom travel packages?  Contact me here!

-Leah D.

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