I don’t know how many times I’ve heard airfare shoppers say, “I thought prices were down but I’m not seeing it. Am I being scammed?” Then there’s the matter of low fuel prices with no corresponding drop in fares. Let’s try to cut through the confusion; I’ll start by saying it’s not a scam, it’s just the airline business. And yes, you can still find cheap flights.
Airfare Prices: An Explainer
To illustrate the situation of confusing airfare prices, let’s take the entire airline industry and shrink it down to a single airline with a single plane.
- One plane with 100 seats
- Fares range from $100 to $1,000, rising in $100 increments
- All seats are filled on all flights
Now using this example, let me answer some questions.
Q: Why aren’t the fares all the same price?
- A: That’s not how it works and it’s not a scam. Airlines may have ten different price points on a single plane; passengers will pay a different amount based partly on overall demand for tickets, the timing of the ticket purchase, and what the passenger is willing to pay.
Q: Who pays the least and who pays the most?
- A: On domestic flights, tickets purchased early (but not too early, about 2 months before departure) will usually be the cheapest; last-minute shoppers will pay the most.
Q: The price of oil is so low yet airlines haven’t passed along the saving to passengers. Why not?
- A: The short answer is, they don’t have to. Demand is good and remains steady.
Q: When airfares go up, all passengers pay more, right?
- A: Not necessarily.
Do Airfare Hikes Always Mean Higher Prices?
Even after an airfare hike (like the one we had earlier this year) you might not always pay more. Take a look at this scenario for our imaginary one-plane airline.
- 2015: The airline makes $50,000 per flight.
- 2016: Prices rise 0.5% but the airline only makes $48,000 per flight.
How can this be? One explanation could be that in 2015, passengers bought tickets on the late side but in 2016, they bought them earlier when fares were cheaper. So even though prices rose overall, some lucky travelers paid the same or even less than the year before. As a result, the imaginary airline made less.
By the way, as of Jan. 1, 2016 airfare prices really did rise on average half a percent (0.05%) over the year before but you can be one of the lucky shoppers to pay the same as last year or even less by following the tips below.
5 Ways to Pay Less for Airfare
Try one tip, try them all.
- Buy tickets in the sweet spot: Shop 3 months to 1.5 months before departure for U.S. domestic flights; shop 5 months to 2 months before departure for international flights.
- Shop on Tuesdays: U.S. airlines typically launch sales on Tuesdays and by 3 p.m. eastern time, the competition has matched the new deals and shoppers have more good prices to choose from.
- Set airfare alerts: This is a boon for local and international travelers who know where they want to go but aren’t sure when to buy. Set an airfare alert and let the deals come directly to you.
- Travel cheaper days: In the U.S., the cheapest days to fly are usually Tuesdays, Wednesdays and Saturday. In other countries, weekdays are generally cheaper than weekends.
- Travel cheaper seasons: In the U.S., flights from September to May are often significantly cheaper than June, July and August – with January the cheapest of all – just avoid peak travel periods at Thanksgiving, Christmas and Spring Break. The guidelines are similar for Europeans but it can vary in other parts of the world. For example, if you’re in Australia or New Zealand, flights in November as well as February to April are often good deals, as opposed to the peak season prices for December and January.
For more tips, please see my Insider’s Guide to Airfare.