Help me buy the cheapest plane ticket I can
February 4, 2009 6:46 PM   Subscribe

How do I game airline yield management systems?

So I am looking to purchase a ticket to visit Barcelona in May and I'm wondering if anyone knows if it is possible to back into how they trade off load vs price vs time to departure?

Basically my theory is that given the incredibly weak economies in the US and Spain demand for flights should be significantly below normal, but that the models the airlines use won't begin to discount the fares until we get closer to the departure date. I'm assuming that this is some sort of non-linear function.

To simply my question - How close to a departure date will the yield management math start to tell the airlines to lower price, or conversely at what point should I take a ticket price that isn't moving as a sign that loads are as expected and I should just bit the bullet?

Additionally is there some place I can find historic fares for different routes?

Before anyone suggests it - farecast.com is lame.
posted by JPD to Travel & Transportation (5 answers total) 6 users marked this as a favorite
 
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posted by arimathea at 7:05 PM on February 4, 2009


Be aware airlines are cutting flight timetables to counter this. If numbers are down by 50% but they cancel every second flight, you will be no better off.
posted by bystander at 11:29 PM on February 4, 2009


I think bystander is right, that being said my favorite tool for booking flights is www.kayak.com -- I've done a ton of comparisons, even with paid sites, and found that Kayak is the best. Good luck
posted by mateuslee at 12:11 AM on February 5, 2009 [1 favorite]


Just to clarify - I'm not looking for sights to check prices. Itasoftware is def my favorite btw. I really want to learn about yield management.

On this particular route cutting available seats isn't an option unless they want to down gauge the airplane or give up the route entirely. And I'm not totally sure they can down gauge from a 767 to a 757 due to range issues. Additionally its a huge leisure destination in summer when loads shouldn't be a problem no matter how bad things get.

There are three airlines that fly to BCN from NYC - Iberia, Delta, and American. They all have one flight a day - 767's for the American carriers, I'm not sure what Iberia is flying by I'd guess a 767 or A330
posted by JPD at 5:09 AM on February 5, 2009


I think you're going to have a very tough time figuring out the optimal point at which to buy. As you pointed out, despite presumably crunching quite a bit of data, Farecast doesn't always give great predictions.

The difficulty is that there are so many unknowns even beyond seat sales volume vs capacity vs time. Each airline may have its own anticipated demand curves and marketing approach. Some of that could be inferred from gathering vast amounts of historical data, but even if you had historical sales pace, it's unlikely an outsider could gather more than an approximation of yield data (i.e., what sold at what price -- keep in mind that the exact same seat may be sold to different fare classes with different restrictions and targeted at different markets).

To address your practical question:
I do agree that if they haven't cut capacity, prices will probably be lower than in the past. But at what point will you get the cheapest ticket? Super-tough to call. I'd say if you're set on going to Barcelona on very specific dates, shop now. If you have some flexibility and risk-tolerance, see if those airlines tend to offer last-minute (e.g., one week in advance?) deals on that route. If they do, then wait until the last minute.

IIRC American has just a $150 change fee. So it might make sense to buy the ticket now, and if the price drops more than $150 closer to the time, change your ticket.

To address your more general interest in yield management:
I highly recommend the book Pricing and Revenue Optimization by Bob Phillips. It's somewhat technical, but pretty readable for the mathematically-inclined layman. It's not really going to tell you how to game pricing (since all the issues of lack of data still apply) but it will give you a lot more information about how the pricing game works.
posted by CruiseSavvy at 10:45 PM on February 5, 2009


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