How are pricing and availability of fares determined?
Pricing and availability of fares are determined using a system of “booking classes”.
According to the International Air Transport Association, these are different travel classes with a series of letters that define the fare level paid.
Some of the common letters are:
- F for full-fare first class
- J for full-fare business class
- Y for full-fare economy
Aviation website Simpleflying.com said each airline uses algorithms and AI technology to set and change prices, and price setting is backed up by extensive data analysis.
“Airlines have always been aware of past sales and booking data and use this to influence prices going forward. But with the improvement of data analysis and artificial intelligence technologies, this data can be analysed and used much more precisely,” said Simpleflying.
Why are last-minute tickets so expensive?
According to Air Advisor, the algorithm assumes more demand from business travellers who are usually booking travel at the last minute.
“Airlines also base their ticket prices on travel demand. Higher-frequented flights at the best times tend to be the most popular and therefore more expensive than those at 5am.
“Special events such as fair trades, sport events or public holidays are also considered. Travel demand increases for such events. As a result, the airlines can usually sell their flights to the relevant destinations at a higher price,” said Air Advisor.