Tuesday, May 1, 2007

Basics of Airline Ticket Pricing - Logical but Good to Know

For most people, ticket pricing can be the most confusing part of air travel. Fares are constantly changing. What your friend paid yesterday for a flight from New York to Chicago is probably not what you are going to pay today for the exact same flight. Even the people sitting in the same section of a flight likely paid very different prices for their tickets.

There are several factors that contribute to the cost of a fare:

Purchase date - The earlier you buy a ticket, the cheaper it will be (most likely). For instance, Delta loads a flight into its reservation system about 332 days from the actual flight date. Someone who buys a ticket on the day the flight is entered is going to get a cheaper fare than someone who buys a seat on the day of the flight.

- Put simply, first class is more expensive than coach (duh!)

Destination - There are certain destinations that cost more, either because of the distance to the destination or the popularity of the destination. This is simple supply-and-demand economics.

Flight date and time - Flights that depart earlier in the day tend to have lower fares because fewer people are flying then. Also, fares go up in the summer vacation season.

Fuel costs - Fuel is an airline's second largest expense. Only labor costs more than fuel. The airlines paid about $5.4-billion in fuel costs, according to the Air Transport Association (ATA). Any increase in fuel costs is usually passed onto passengers in the ticket price.

Competitors' fares - An airline has to be careful not to price their fares too much higher than their competitors. Sophisticated computer software is used to track the fares of competing airlines.

Special factors - There are certain specialty fares given to senior citizens, government and military employees and corporate customers.

Another factor that can affect ticket pricing is the hub system itself. If a large airline controls a lot of the gates at a particular airport, it may charge higher ticket prices. That large airline has the most flights coming into that airport, so consumers have to pay the higher fares if they want to fly into or out of that airport. So find out if connecting at different airports affects your ticket price.


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