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Learn about Yield Management and How This Money-Saving Method Works
- Flight prices are always changing; airfare prices drop and rise frequently.
- Frequent or even infrequent fliers can find the right prices for their flights through several techniques.
- Airlines want to give you the best prices available, but there are factors that decide how much your ticket will cost.
- Use the eight-week rule to purchase tickets at their best possible price.
- The day of the week will greatly affect your ticket price.
One of the fascinating things for travelers looking to book a cheap flight is the fact that ticket prices change constantly. This can be influenced by a number of different factors. There is no set value for any route.
When it comes to getting a ticket for a flight, yield management is a term that not many airline passengers have ever heard mentioned. This concept is important to understand if you’d like to find out when flight prices drop and why a ticket that is bought in November can cost $100 less than the same ticket that is bought in June.TAP TO START YOUR FLIGHT SEARCH
Yield Management at a Glance
Yield management has three tenets that affect flight price changes:
- Pricing Strategy – Airlines want to maximize their profits, and as a result of yield management, many airlines have been successful in doing so. Pricing strategy effectively alters the price based on customer need. For example, someone traveling for the holidays might reserve their flight months in advance and may save money by utilizing a deal. A business flier, on the other hand, might need to fly at a moment’s notice and will, as a result, pay full price for the ticket.
- Availability Control – When it comes to yield management, an airline has to make an educated guess about how many standby or empathy seats are available per flight. Controlling the availability is effectively how each airline reserves a certain number of seats for people who plan ahead (leisure fliers) or people who fly for the full price (typically business fliers).
- Control of Inventory – This tenet of yield management is simply the availability of aircraft, employees, and fuel. This just ensures that each of these factors is maintained so that flights and resources are available for the potential customers.
The Flight Pricing Cycle
Flight pricing trends have a tendency to spike. When do flight prices change the most? Airfare has something of a weekly cycle that you can use to find the best possible pricing for your next trip. While pricing tends to go upward in general during the week, there are trends that can end up saving you some money.
- Monday nights tend to be when many airlines will launch their discount promotions. This price change can help you save anywhere between 15 and 25 percent off your ticket. If you want to take advantage of the drops that occur on Monday night, the best time to check fare prices is Tuesday morning.
- Thursdays are the days to avoid purchasing a ticket. On this day, the markups happen; many airlines routinely tack on as much as $10 per purchased ticket.
- Weekends are also very volatile. While it’s true that airline inventory isn’t managed as well during the weekend, cheap seat purchases will actively cause the fare prices on some flights to increase. Since it’s the weekend, this process is automated; any extra seats will be sold off on Monday for a reduced rate by fare analysts.
- Some airlines, like Southwest, offer seasonal sale prices which means that prices drop across their routes if you book for flights in a particular time window. These sales are often limited to a finite amount of seats.
When Do Flight Prices go Down?
You may be surprised to learn this, but flight prices generally don’t change drastically within a short period of time. Instead, airfare gradually increase over weeks and months. For international flights, the sooner you book the better. For domestic flights, the sweet spot is within the 21-42 day range (about 3-6 weeks out). Prices just aren’t as good outside of that time period.
TAKEAWAY: Book at least 3 weeks out. Airfare does rise rapidly under 3-4 weeks out.
Interestingly, if you book the day of your flight versus just 1 day in advance, it will cost you, on average, $29 for domestic flights and $45 for international flights. If you book the day of your flight versus even 1 week out, the cost difference increases to, on average, $100 on domestic flights and $85 on international flights.TAP TO START YOUR FLIGHT SEARCH
The Eight-Week Rule
How often do flight prices change? The answer is, unfortunately, often. As you can see from the cycle, a trip purchased on Monday can be much cheaper than one purchased later in the week. According to industry analysts like Makoto Watanabe, the best time to buy airline tickets is about seven to eight weeks in advance.
Some Other Suggestions
If you have less than eight weeks to decide, keep checking the airfare prices constantly. Skyscanner allows you to set up price alerts that will tell you when your flight has dropped in price. Also, try to fly midweek because these flight times tend to cost a bit less on average.