How do you fix the prices of the flights?

Who has not seen varying prices for the same flight? In a matter of days, and even hours, the rates that present the airlines can change.

“There are many variables that influence the pricing of the flights. Not only the distance, also the wage costs or the fuel“, they claim from the Organization of Consumers and Users (OCU).

  • The airlines set their fares based on parameters such as supply and demand or the price of fuel.
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The price of fuel

The price of fuel has a huge weight within the cost faced by airlines. It is for this reason that their variations may affect the time of fixing the rates of the flights.

From the beginning of 2017, the price of a barrel of Brent has increased. The International Air Transport Association (IATA, for its acronym in English) estimated in its march report that oil prices will remain stable until 2019, something that will affect the revenue of the companies.

Different rates and conditions

The cost of the flights varies depending on the services with those who want to have or the type of rate that you want. It is not the same to book a flight well in advance to do it at the last minute, or you travel in high season or low.

“For each path is fixed, a rate structure that can include 30 or 40 levels of prices, each one with its conditions of application in terms of season, minimum and maximum stay, advance purchase, and also the services that you want to receive the customer”, come from Iberia.

Supply and demand

“Companies lose money if the flight is not going all so full that it is possible to” argue from the OCU. An empty seat is equivalent to a loss of money from the perspective of the airlines, therefore, always seek to maximize the demand.

Currently, the price is more important than ever for travelers, something that companies have very clear.

“When you open a flight, the rates can be especially cheap to ensure a minimum occupancy. Once reached, the price may be increased to earn more money. Yes, if when it is missing very little for the flight are still quite a few places, is likely to decrease greatly the rate to make sure as well raise some more with the flight instead of having many empty places”, explained from the OCU.

“Ryanair continues an active strategy with respect to the occupancy rate and passive in relation to the yield [profitability]” point from the irish airline.

When they fall excessively the fees, the airlines are facing certain problems. “You can have the plane full but lose money”, ensures Javier Gándara, ceo of easyJet in Spain and President of the Association of Airlines (ALA).

How do you put a price on the tickets?

Each airline performs the rating function of internal criteria, but it is true that all of them are moved according to certain common parameters.

To find the optimal price of a ticket on a day and time certain, companies use algorithms and computer programs.

“We employ a management system that is very sophisticated and tries to anticipate how the demand, using even artificial intelligence,” says the general director of easyJet.

“In Iberia we handle powerful programs that combine the inventory of fares with the availability on the flight,” told from the airline.

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