When do you book a flight?

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It seems that the price of airlines ticket is changing everyday. We are interested to find out the best day of the week or month to buy a ticket. So when can we buy the discounted tickets offered by the airline?

The fact is that prices are fluctuating before the flight’s departure. It can drop at any minute, and we cannot make sure which day the airlines can give the lowest price.
We can only make sure that we have to pay full fare at the last minute before the flight departures.
The airline industry has a complex and sophisticated pricing system to maximize its profit. No company wants to discount its products all the time.

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Why Fares Change all the Time

Over the past decades, Airlines have used “yield management” successfully to control prices’ fluctuation. Yield management is defined as the techniques used to allocate limited resources among a variety of customers in order to optimize the total revenue or “yield” on the investment capacity (Donovan, 2005). On the same flight, there are different prices of tickets, ranging from the most expensive full fare to the cheapest discounted price. Then, yield managers allocate these prices on different seats based on the previous experiences. They monitor and adjust the seat allocation. Usually, they will give more discounts on seats about two months before the departure date, because the sales are slower than expected. Meanwhile, airlines’ yield managers start to look at seats booking. For example, if you find today’s ticket price is different to that of yesterday, this is probably not caused by the airline’s manipulation to raise or lower their prices — at least not on purpose. In fact, it may be because seats with the lowest fare were sold out. For instance, if the lowest fare tickets were closed out, the second lowest available price will change to a bit higher price. Or if the yield management system reckons that bookings will be strong consistently, they may choose to close the current lowest fare seats and then the fare will appear to “jump” to a higher price. However, if some passengers choose to cancel their tickets approaching the flight departure date, the yield manager might decide to reopen the original lowest fare seats because they have way too many empty seats than they expected. This whole process will occur continuously until hours before departure. Generally, fares on a particular flight will get higher and higher over time because the available booking seats are less and less gradually. But there are moments when fares temporarily drop before heading back up once new bookings come in. As there are hundreds or thousands of shoppers looking for flights and reserving their seats, this entire process is extremely dynamic. Each passenger’s reservation may have influence on the fares paid by subsequent travelers on the same flights (Cheapair, 2011).

Here are some tips to get a cheaper airline ticket:

• Book as far in advance as possible
• Avoid peak traveller hours
• Avoid surcharges
• Use flight comparison sites to compare ticket prices, but be sure to check the airline’s own site before making a purchase.

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References:
Cheapair, 2011, Why do fares change all the time, viewed 29 April 2016,

Air Fares 101 – Why do fares change all the time?

Donovan, 2005, Yield management in the airline industry, viewed 30 April 2016,
http://commons.erau.edu/cgi/viewcontent.cgi?article=1522&context=jaaer

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