Airline Ticket Pricing

Next time you fly, have a look around the plane at your fellow passengers. Chances are that hardly any of them have paid the same amount of money as you for their plane ticket. In fact, some might have paid up to ten times as much as others; just for the same few inches of leg-room.

Providing a definition of a 'cheap' airline ticket is difficult; we tend to buy plane tickets that meet our needs, at a price we are willing to pay. For example, say you wanted to buy a return ticket from New York to Heathrow. If you were booking 6 months ahead and were flexible with your dates, you might not think that a fare of $1,200 was a particularly good price, and you'd probably want to pay something more in the region of $500-$600. However, if you needed to buy a ticket urgently to fly tomorrow, you might consider that same $1,200 a pretty good deal.

All airlines want to sell their seats at the highest price possible. Their official IATA (International Air Transport Association) airfares are often published more than a year ahead, but these are so high that only very few people actually pay them. The only people who are likely to buy these full price fares are business travelers and people with an urgent need to travel. Neither of these types of group tend to search for cheaper alternatives; the business travelers lack any incentive to do so as they are often fully reimbursed by their companies, while those who find themselves having to travel at the last minute simply don't have the time.

As the planes would end up being fairly empty at the IATA fares, the airlines also offer discounted fares. Airlines employ specialists, who try to calculate, given market conditions, when to offer seats for a certain price. However, there will only be so many seats on offer at this discounted price, and as soon as these are sold, then the fare will rise once more. A few weeks later, depending on bookings, cheaper seats may be offered again.

Read further in this section for tips on finding the best plane fares.