- Finding Cheap Flights - Introduction
- Finding Cheap Flights - When Time Matters
- Finding Cheap Flights - When Place Matters
- Finding Cheap Flights - Search Tools
This article is about how airfare is influenced by date and time, both for the time of booking as well as the time of travel. First some unsurprising facts:
- Airfare is dominated by plain supply and demand.
- That means that flying during high season and holidays is more expensive. (Everyone wants to fly home during Thanksgiving or wants to take a vacation in the summer)
- Booking late is more expensive than booking early
However, there are also some other subtleties that many are not aware of. Did you ever wonder why booking a one-way ticket is usually more expensive than booking the same route as a round-trip? Ever felt angry that booking a last minute flight was ridiculously expensive, only to find the airline not being able to fill all the seats after takeoff? Why changing the date of your ticket costs so much? It all has to do with one thing: price discrimination.
As a wannabe-economist, price discrimination is one of the most fascinating phenomenon. It's pretty simple in the case of airfare: there are leisure travelers like you and me and business travelers. Business travelers have a lot of money so spend on airfare, leisure travels not so much. Airlines are a for-profit venture, so they want to make most of two the groups. If they price the tickets too low, they might be able to sell more tickets to leisure travels. However in this case, they would miss out on a lot of revenue with the business travelers who would be willing to pay a lot more and are more concerned with flexibility and comfort. Conversely, if they charge high prices, they get much more money from the business travelers but leave many seats empty because the leisure travels can't afford the price. So how do airlines solve this dilemma?
They obviously cannot "openly" discriminate and say leisure travelers pay $XX and business travelers pay $XXX (which would be the most economical and fair solution though). So the next best thing is to create different classes of tickets to incentivize leisure travelers to buy booking class A while business travelers buy booking class B. Let's see how this works out in reality:
1) One-way is more expensive than Roundtrip
Leisure travelers rarely have to fly from A to B one-way, while business travelers regularly do so. That's why airlines used it as a great discriminator by charging as much as tenfold for one-ways compared to road trips. Think about it: It's more profitable for an airline to charge 1 business traveler $1000 for a one-way then charge 1 business traveler and 4 leisure travelers $100. Theoretically, the common practice of just buying a round-trip and just not using the return leg is forbidden in the airlines terms of service and they are entitled to reprice the ticket accordingly. In reality however, airlines rarely do so.
2) Booking late is more expensive than than booking early
Leisure travels usually can/have to plan their travels long ahead, while business travelers usually do so on short notice. That's why booking class A (the cheaper one) is usually only available weeks/months in advance, while booking class B is bookable anytime.
3) Wanting to Change/Cancel Flights is more expensive
Related to 2), leisure travelers rarely have to change or cancel their flights, whereas business travelers regularly do (schedule changes etc.) That's why booking class A has fees for changing/canceling flights whereas booking class B is more flexible with that.
4) Red-eyes are cheaper than flights during the day
Business travelers don't feel like taking red-eyes (flights overnight). Neither do leisure travelers, but they are willing to take them for lower prices.
5) Saturday returns are cheaper than Same-day returns
Leisure travelers usually travel for a week or more, while business travelers oftentimes are only gone for a day if at all. That's why many of the cheaper booking classes have the so-called saturday-return restriction, where you can only return after staying for a saturday night or prohibit same-day returns, i.e. arriving in the morning and leaving in the evening.
6) Flying Monday Mornings are more expensive than Tuesdays
Business travelers have particular schedules that you can work around to get cheaper tickets. Monday mornings are usually rush hour for business travelers, the weekend is popular as well for both leisure and business travelers so try to avoid these times. Statistically, it's best to fly on Tuesdays.
7) Booking Monday Morning is more expensive then Tuesdays
Again, try to avoid popular times for booking your flight. Business travelers often do it in the mornings, especially Monday. Leisure travelers on the other side often book on the weekend. Once again, Tuesdays are best.
That being said, every rule has it's exception, so take these with a grain of salt.