How to buy the cheapest airplane ticket


Introduction

The most flexible prices in the world are the ones of airline companies. At one moment the price is €90 and a few minutes later the price is €100. In this article I will try to unravel a part of the pricing algorithm of Airliners. From now on, you know how you can find the cheapest ticket, or at least as cheap as possible.

‘Airline pricing is a combination of art and science’ a spokesman of Kayak once said. The goal for the airliner is simple: make as much money as possible on each seat and make sure that no plane leaves with an empty seat. Of course this is not possible, but Ryanair is making a good effort. This summer Ryanair managed to break a record, it had an occupancy rate of 95%, while KLM had an occupancy rate of just 90,1% (Standaard, 2015) (Telegraaf, 2015). So how can airliners make as much money as possible from every seat? And how can you use this knowledge againt them?

Seat availability

Most people think that booking as early as possible is the key for the cheapest air plane ticket. In some way this makes sense. People who book in advance are mostly leisure travellers, and people who book only a few days before the flight are mostly business travellers. They probably have to go to an important business meeting and would like to pay a lot to get on the plane. In contrast to this assumption, research has shown that the best moment to buy your ticket on average (just) 45 days before departure. But keep in mind that this is an average, and it really depends on your destination. For instance, this rule also does not apply in the summertime. During the summer it would be better to buy your ticket about 100 days before departure. One thing is certain, last minute deals do not exist anymore. Booking a ticket one or two day before departure will probably be the highest price the airliner would dare to ask (CheapAir, 2014).

You

Are you a Mac user? It might be handy to buy your airplane ticket on a Windows next time. As been told during the lecture, Orbitz got sued because they asked higher prices when a Mac computer is used, than when a Windows computer is used. Although this is in the hotel industry, I dare to guess that this trick is also used in the airline industry (Dignan, 2012).

The cheapest ticket I ever bought was €12,50, a ticket from Manchester to Dublin. The transfer price to the city center of Dublin was even more expensive. But I did not get this price without a fight. I was browsing through different booking sites and eventually I found a ticket for €12,50. When I later came back for the same ticket the price was raised to €13,50. I, as a true Dutchman, was of course not planning to pay this stunning €1 extra. I deleted my cookies and the price was back to €12,50 again. When you are booking, always keep in mind that the airliners use cookies. Some websites even keep track of your IP adres, which means that you have to use another router to get the original price. Moral of the story: Big airliner is watching you.

Competition

One of the first things you learn during your business course is that the price declines when there are more competitors. Every year the average ticket prices decline with 2-3%, and it is estimated that this price trend is not going to change in the upcoming years (Eldering, 2015). So do you want to go on a cheap vacation? Look for destinations with a lot of (low-budget) airliners, the pricing algorithm of an airline always looks to the price of competitors.

Right place, right time

With Ryanair you fly from the middle of nowhere to the middle of nowhere. Flying to less popular destinations (like London Stansted instead of London City Airport) keeps the prices of budget airliners low. For the airline it is also cheaper to buy departure times in the morning, which has an effect on the ticket price. Being an early-bird can save you a lot of money!

Conclusion

Now you have an idea of how airliners determine their prices. Although there is no golden rule for getting the cheapest price, it turns out it is better to book really early, than booking really late.

References

Cheapair (2014) ‘When should you buy your airline ticket’ https://www.cheapair.com/blog/travel-tips/when-should-you-buy-your-airline-ticket-heres-what-our-data-has-to-say/, 2 october 2015

Dignan, L. (2012) ‘Mac users just love to pay more says Orbitz’ http://www.zdnet.com/article/mac-users-just-love-to-pay-more-says-orbitz/, 2 october 2015

Eldering, P. (2015) ‘Vliegtickets wordt goedkoper’ http://www.telegraaf.nl/reiskrant/24481967/___Vliegticket_wordt_goedkoper___.html, 2 october 2015

Standaard (2015) ‘Ryainair verbaast zichzelf met nieuwe records’ http://www.standaard.be/cnt/dmf20150909_01858508, 2 october 2015

Telegraaf (2015) ‘Stijging aantal passagiers Air France KLM’ http://www.telegraaf.nl/dft/bedrijven/airfrance-klm/24471550/__Stijging_aantal_passagiers_Air_France_KLM__.html, 2 october 2015

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: