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Old 03-07-2009, 03:41 PM   #1
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Why does ticket costs fluctuate so much/fast on Orbitz and variants?

As the title suggests? What governs the price of a plane ticket, and why would a ticket fluctuate a hundred dollars or so [without warning]/[nearly instaly]? Thanks in advance!
Old 03-08-2009, 09:58 AM   #2
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Since the airlines are trying to get the highest fares possible, they change the fares several times a day depending on demand. To be honest, airline ticket pricing seems to make the stock market look simple, clear and understandable.
Old 03-08-2009, 10:28 AM   #3
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As close as you will get to a explanation is that, once having decided to run a 'plane, the marginal cost of an extra passenger is negligible.

So, if you think you are about to get n passengers, almost any income you can get from an n+1 th passenger is going to go to 'profit' (or loss reduction) even if you charge them way less than
 cost of flight / number of passengers

Of course, if you think that there is any chance that you will be overbooked, you want to get as high a price for each seat as you can and while this is the operating region in which you would like your airline to be operating, it is not a common case. (And, of course, if you do have an overspill, you would like your overspill to go on to another of your flights, rather than defecting to a competitor.)
Old 03-08-2009, 03:57 PM   #4
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Originally Posted by RHLinuxGUY View Post
As the title suggests? What governs the price of a plane ticket, and why would a ticket fluctuate a hundred dollars or so [without warning]/[nearly instaly]? Thanks in advance!
The airlines have highly developed yield management (profit maximizing) software that they use to recalculate prices instantly, based on past experience and current demand. The stuff is run on supercomputers such as made (or were made) by Cray. Every conceivable factor goes in, including the fact that if they have to move a plane from point A to point B simply to be in place for the next day, then seats can be cheap since the plane has to fly anyway.

As noted by others, the marginal cost of schlepping a passenger is near zero. Add to the fact that seats expire (no more seats can be sold when the plane is in the air, for example), airlines milk every last dime they can.

Sometimes it doesn't make sense, given that other industries don't do that (you don't pay extra for a restaurant table on Friday night, for example), but airlines insist on that system as the way to maximize profits (or minimize losses, which is the same thing nowadays).
Old 03-12-2009, 08:57 AM   #5
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Originally Posted by RHLinuxGUY View Post
What governs the price of a plane ticket, and why would a ticket fluctuate a hundred dollars or so?

On a mildly related note, a friend and frequent traveller told me the following story:

He looked up a flight on a "cheap tickets" search engine (I don't recall which one). After getting a relatively good price for the flight he wanted, he checked other search engines. Not finding a competitive price, he returned to site A.

How was now quoted a *significantly* higher price for the same ticket. Note: we are speaking approx 30 mins later. He checked the pricing a couple of times, but it did not go down again.

He finally deleted all browser cookies, and was immediately offered the low price again.

Can anybody confirm or refute this tip?

(I must admit not having tested it, as I do not book flights online)

(who is happiest standing on terra firma)


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