Get the Cheapest Flight Every Time

Airline pricing policy is peculiar to say the least. Imagine this, 2 customer’s walk into a local consumer electronics store to a purchase a television. They both walk out with the exact same TV – same size, same features, same model number but one customer is charged $350 more than the other. It sounds outrageous when making the comparison to any other industry but this is completely accepted in the airline industry.
Two economy passengers on a flight from San Francisco to New York compare their ticket prices only to find that one passenger paid hundreds of dollars more for the exact same flight (and they both still have to pay for $7 extra for a pillow and a blanket.) Believe it or not there is a method to the madness and understanding this method is the first step to ensuring you are paying the cheapest possible price for every flight every time.

AIRLINE PRICING POLICY
The method airlines use to maximize revenue is to A. Maximize passenger yield (average price someone pays to fly one mile) and B. Maximize occupancy rates (fill as many seats as possible on the plane.)

1. Maximize passenger Yield. Airlines recognize that each passenger has a price threshold when it comes purchasing a seat on a plane – that is a maximum price a passenger is willing to pay for a seat. It’s the airlines’ job to figure out what that price threshold is and offer a price that is as close as possible without going over. While most consumers purchasing a television expect to pay approximately the same as the next guy, a business traveler for example might be willing to pay a much higher fare than a leisure traveler as typically business travelers are stuck to a strict schedule.
2. B.Maximize occupancy rates. Unlike a television sitting in a consumer electronics store, airline inventory has a strict expiration date. Once that expiration date is reached (the plane departs) any empty seats are lost revenue. The airline will use historic data to figure out just how many discounted tickets need to be sold in advance, in order to fill enough seats and still have additional seats on hand for last minute business travelers. Of course, this isn’t a perfect science and airlines will often adjust their pricing up to 4 times a day, in order to adjust to the current conditions, and also rely on travel agents and online travel agencies to sell excess inventory.

PUBLISHED, PRIVATE & OPAQUE FARES

The main issue that most airlines face is that maximizing passenger yield directly conflicts with maximizing occupancy rates. The airline wants to fill seats at any cost to make sure the inventory doesn’t expire but also knows there might be a business traveler out there willing to pay hundreds of dollars more for the exact same seat. The solution is carefully managed inventory, also known as private fares, allocated to air consolidators, travel agents and online travel agencies. While published fares fluctuate daily and generally follow a traditional set of algorithms used to determine your price threshold, private fares generally remain the same price and can be sold at anytime up to the advance purchase requirement - sometimes up to 3 days before departure. What this means is that consumers buying a last minute ticket with a low price threshold can purchase a discounted private ticket while the airline can maintain the integrity of its published pricing policy in hopes that a business traveler will come along a higher priced seat. Airlines can further protect their pricing structure by offering select agencies opaque fares which are sold to the public without identifying the airline or flight numbers until after the purchase is complete.

1. Published Fares. Published airfares are available through the airline directly and also sold through any travel agency – both traditional and online. Published fares can fluctuate multiple times a day as the airline attempts to maximize revenue for a given flight. A published fare will generally be the same price whether purchased through a travel agency, online travel agency or through the airline directly.

   Follow these steps to get the cheapest published fare:

   1. Use a meta search engine. A meta-search engine such as Kayak- www.kayak.com will search all published airfares in one aggregator.
   2. Book in advance but not too far in advance. The prime time to book a published fare is usually 2-4 months prior to the flight when the airline begins to lower its prices in order to fill seats. Many airlines follow a 21, 14, 7 day advance purchase structure for last minute tickets – 21 day advance purchase yielding the cheapest fares.
   3. Include a Saturday night stay. One way airlines determine if you are flying for business or leisure is whether your trip includes a weekend. Leisure travelers generally fly over weekends and business travelers during the week.
   4. Fly round-trip. One way travelers are placed at a higher price threshold than round trip passengers and airlines often increase one-way fares to greater than the cost of a round-trip ticket.
   5. Be flexible. Since the airline pricing model is based highly on supply and demand changing your dates by just a few days could introduce a flight with additional discounted inventory.
   6. Book a package. Online travel agencies offer cheaper flights when booked with a hotel. Try the flight + hotel option on Expedia – www.expedia.com.
      
   7. Avoid the holidays. This one might seem obvious. Discounted inventory is scarce around the holidays as everyone’s price threshold is a little higher.
   8. Sick to the big airports. Big airports have a greater number of flights, which means more competition and more discounted seats available for purchase.
   9. Search low cost carriers. New, low cost airlines like to play by their own rules. They often do not follow the traditional pricing structures of legacy airlines and sometimes their best fares can only be found on the airline’s own website. Try JetBlue, Virgin America and Southwest.
2. PRIVATE FARES. Private airfares were introduced as a way for airlines to sell excess inventory while keeping their traditional advance purchase pricing structure intact. Private fares can be purchased through any number of travel agents or online travel agencies. Private fares are generally given to agencies at a net price, meaning the fare sold to the customer will include an agency markup in order for the agency to make a profit. Online travel agencies often pre-determine this markup given the current available published fare while travel agents may have more control of the markup added at the time of purchase.

   Follow these steps to get the cheapest private fare:

   1. Use a Travel Agency. Since private fares are not available through the airline directly try all the major online travel agencies – Expedia, Orbitz, Travelocity and also call a qualified brick-and-mortar travel agent.
   2. Travel on weekdays. Private fares often have surcharges for traveling on weekends.
   3. Shop around. Each private fare contract will be priced slightly different and each agency will decide an appropriate markup amount.
   4. Search for your ideal itinerary. Private fares are great for one-way tickets and can allow for large discounts for travel out of smaller airports - sometimes hundreds of dollars cheaper than the same exact published fare.
   5. Best for international tickets. While some domestic private fares do exist, especially if you are a student, teacher or under 26 (try STA Travel – www.statravel.com) most private fares are for international itineraries.
3. OPAQUE FARES. Opaque airfares offer an additional protection to airlines that are looking to keep their traditional pricing structure intact. Opaque fares omit airline identification information until after the flight is purchased. The customer is not shown the airline, the flight number or the flight times until credit card information is entered and tickets are issued. Opaque fares can offer large discounts for the flexible traveler but are usually non-refundable and non-changeable.

   Follow these steps to get the cheapest Opaque fare:

   1. Search online. Opaque fares are sold on 3 major sites: Vayama – www.vayama.com, Hotwire – www.hotwire.com, and Priceline – www.priceline.com.
   2. Do your research. Check the airlines directly for the lowest priced published fares and make sure the opaque fare is the best deal out there. By studying the airline’s schedules you may even be able to guess the flights you’ll be on.

GET A REFUND IF THE PRICE GOES DOWN

A little known trick in the airline industry is that most airlines will happily refund you the difference if the price of your flight decreases after you make your purchase. The catch is you have to ask for it at the right time when the price is at its lowest. The online tools below will do most of the work for you but to be eligible the flight must be booked through the airline directly not through a travel agency. Refunds are usually paid in flight vouchers for future travel but check with the airline prior to purchase as policies vary and some flights may be ineligible.

ONLINE TOOLS

Luckily, there are some great online tools out there that will further help you get the best price every time.

• Yapta – www.yapta.com. Yapta is a flight search and price tracking site that will search every major airline for the cheapest flight. Yapta will also allow you set up price change alerts for your upcoming trips. When the price goes down, Yapta will email you and prompt you to purchase the ticket. Once the ticket is purchased Yapta will continue to track the price of your trip until the day of your departure. If the price decreases further Yapta will email you again with the information needed to request a refund from the airline. Yapta searches published fares only and links you directly to the airline during flight purchase.
• Bing - www.bing.com/travel. Bing Travel is part of Microsoft’s search engine technology which acquired Farecast in 2008. Farecast developed an algorithm that tells customers whether or not they should wait to purchase a flight in order to get the best price. Bing has implemented this technology into their travel search feature. When performing a search, Bing will automatically compare the current price with historic data and determine whether fares are likely to rise or fall in the coming weeks. Bing’s fare predictor will then display fare history and advice whether to buy now or to wait.
• Airfare Watchdog – www.airfarewatchdog.com. Airfare watchdog is a great deal finder for flexible travelers. You can request email alerts from either your origin or destination airport and get a list of travel deals delivered to your email box each day. Airfare Watchdog lists fares that are lower than historical averages or those that have recently dropped significantly in price.
• Travelocity – www.travelocity.com. Travelocity offers a flexible date feature where you’ll be able to see the cheapest listed fares for any range of dates and then search for availability for those fares on the specific dates you choose. A great option for the flexible traveler that wants the rock bottom price.