Thursday, June 13, 2013

But wait....there's MORE!

The TV news last night had a brief story on the great disparity of airline ticket prices.  You might have paid $500 for your seat while the person sitting next to you paid just $200.  Why is that?  All the news said is the airlines wouldn't discuss it.

I don't know's really pretty simple.  Their system is called "yield management" and its goal is to not leave any $$$ on the table when the plane takes off.  Their computers know exactly how many seats on each flight, to each destination, on every day of the week, every month of the year, should be sold 21 days out, 14 days out, 7 days out, 3 days out, (actually hour-to-hour) right up to the time of departure.

If, for example, they know that 21 days out Flight 1234 to Seattle should already have 50 seats sold, but instead has only 40 seats sold, they'll offer 10 discounted seats to get ticket sales back to par.  Then 14 days out they'll look at the numbers again and discount a few more to get them back to par if ticket sales are lagging, or if they're ahead of projected ticket sales they'll offer no discounts at all.

Every day, every hour actually, the algorithm will tell them whether to hold firm on ticket prices or sell 'em cheap.  In theory if just a few days out they see they're way behind filling seats they'll panic and offer some great last-minute deals.

That's one way the travel sites like Expedia and Travelocity can offer the deals they do.  The danger is if you wait that long and they're not offering any discounted seats (and you have no way of knowing) you'll have to pay an exorbitant last-minute price.  Ouch!

There really isn't any way to outwit their computer.  Your best bet is simply to check prices often and fly at the most unpopular times of the day on the most unpopular travel days of the week.  

Or date a flight attendant and have her fix you up with a "buddy pass".  *wink*



  1. I wonder if hotels use the same kind of system? I was looking for a hotel when I got on vacation next month and prices were all ridiculous. Everywhere above roach motel status was $120 for just a basic room and the roach motels were like $100 a night. I'm sure if I'd booked farther ahead of time it would have been cheaper. Or maybe I should have looked for a really unpopular vacation spot like Gary, Indiana.

    1. Every industry with perishable commodities utilizes yield management. Last minute deals are there.

  2. Mrs. Chatterbox says I can't date flight attendants so I need to find a different path to cheap tickets.

  3. Hah - very interesting. I once flew out of Tampa into Buffalo in the middle of winter, on the Friday before the Super Bowl took place in Tampa.

    It was a very cheap ticket.

    But really, they should have paid me to occupy a seat on a plane out of Tampa...they had so many planes coming in that day, they had to make room for them. And really, who goes to Buffalo in the middle of winter?