Buying one airline ticket, for example to Bangkok, seems like a lottery. I often hear comments from people around me about the lack of transparency in the airline ticket market. Everyone would like to score that conscious flight offer to Bangkok. But the common complaint is that the starting price advertised is almost never bookable.
The reason for this is that many airlines only sell a limited number of seats for that low price (with exceptions). Airlines use revenue management, also known as yield management. The price of an airline ticket is flexible and is determined by complicated computer calculations. Society has only one interest in this: selling as many seats as possible for the best price (maximum return).
Pricing flight tickets
Price elasticity is used to determine the price of an airline ticket. The price elasticity of demand gives the relative (percentage) change in the quantity demanded as a result of a relative (percentage) change in the price of airline tickets. With this outcome, the airline can, for example, estimate whether a price change of the airline ticket in combination with a change in the demand for tickets (sales) will lead to an increase in turnover or, conversely, to a decrease in turnover.
To do this, airlines used special computer programs on their own reservation systems, which offer the right number of seats to the right number of passengers, at the right price. This software uses historical and current reservation data and makes a prediction about future reservations and optimal use of seats. The current price of the flight ticket is also determined on the basis of this. This whole process is called yield management. This also means, for example, that the person sitting next to you on the plane paid a different price for exactly the same seat. That difference can be significant. A study of Ryanair's fares showed price rises and falls as high as 640 percent.
Although the principle comes from the aviation sector, it is also used to sell hotel rooms at the best price. The so-called last-minute offers are also a form of yield management.
Cheap return tickets to Bangkok: the opaque prices of airline ticketsPrice flight ticket transparent
Still, there is light on the horizon of cheap airline tickets. More and more airline ticket comparison sites are able to provide insight into the factors that determine the price of an airline ticket, although a database containing historical price data, among other things, must first be built up.
For example, the flight ticket comparison site Momondo launched a new tool 'flight insight' this week. This function maps the influence of six different factors on the ticket price.
Search for cheap airline tickets
The feature – placed above the flight results – provides a transparent insight into how airlines set their prices; the feature helps the user use certain essential factors in the search for cheap rates. The tool currently applies to 400 routes, but more routes are added on a regular basis.
Six factors that influence the price of a flight
In yield management, the airline uses many more variables to determine the price shown to consumers. Momondo has mapped out some of these, such as:
- departure on time;
- day of the week;
- week number;
- exact airport (if there are several airports at destination);
- the providers;
- the number of days before departure.
The results are displayed in a pie chart and summarize the most expensive and cheapest options for each factor on a given route. The graphs show how the different variables all affect the price of an airline ticket. The new tool uses data from millions of up-to-date prices obtained in previous Momondo searches.
Because data collection is an ongoing process for Momondo, the flight insights for each route will adapt to changes in each local market according to the number of fares collected in the future.
Flight tickets to Bangkok
In short, if you are looking for a cheap flight ticket for a trip to Bangkok, use a price comparator such as Skyscanner and Momondo. Determine your own variables in advance and remember that the more flexible you are, the easier it will be to find a cheap flight ticket.
More information: www.momondo.nl