Airline Pricing: A good explainer

http://blog.vendoservices.com/vendo-blog/2015/05/22/we-dont-want-to-test

ConcordDuy NguyenPaper Airplanes with Dollar Bills

It’s a long explainer but it’s a good one. The guys over at CheapAir.com make sense of the complicated process airlines use to determine prices. Why? They’re tired of getting emails from frustrated/happy clients who’ve seen higher/lower prices on the airlines check-out pages.

The key concepts are illustrated by an example of a United Airlines flight between Los Angeles and Chicago:

  1. Dozens of prices for each seat (43 prices for one seat in the United Airlines example)
  2. Real time demand monitoring to adjust prices dramatically (from $109 to $1,765 in the example)

“Airlines have computer programs that are constantly monitoring flights, analyzing booking patterns, and in real-time changing the number of seats available at each fare level.”

Thanks to CheapAir.com for such a clear explanation of the airline pricing process.

How much money would airlines lose if they didn’t price like that? Hop in the comments section to discuss.

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