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Ever wondered why plane tickets are so expensive? How often have you decided against booking a plane ticket just because there was an unanticipated surge in price? Quite a lot, right!
Let's unwind the complicated process of plane ticket pricing and how to avoid being the passenger who ends up paying the highest.
Whether you're a frequent flyer or not, the price-mechanism executed by airlines is a mystery to the layman. Unless you're a part of the revenue management department of the airline's company, there's no way you can know what the fares will be for tomorrow. You must have noticed that plane ticket generally cost the highest in the month before it's departure.
If you book the ticket few months in advance, you might pay about Rs.2000-Rs.4000 less compared to the price charged a week before it flies. Also, the airfare keeps changing almost every week before the day of the flight. What's the logic behind this?
Factors affecting pricing in the Airline Industry
To understand how airfare is worked out, it's essential to know what are the factors that affect the prices. On a broad level, we can say that demand for the flight tickets, supply or capacity of the plane, competition faced by the airline and the price of fuel, predominantly determine your airfare, so, the fluctuations in any of the factor would cause the prices to change.
Let's assume that you're booking plane tickets from Delhi-Hyderabad on 4th of July. The airfare from Delhi-Hyderabad departing on 22nd of August would cost about Rs.2000 but if you book a day before departure, i.e, 21st of August, the tickets would cost you an additional Rs.3000-Rs.4000.
Who is traveling?
The cost of the flight ticket varies because airline passengers are divided into two genres; business class and economy class. The business class flyers are generally flexible with the prices but not the dates, and the economy class flyers are flexible with the dates but not the prices.
A business class flyer would be willing to pay an additional Rs.4000 if they have a conference meeting in a different city within the next 15 hours, but an economy class flyer won't be willing to pay additional money since he/she is flexible with the date of travel. So they would rather look for a distinct date when the fares are well within his/her budget. So, the demand for a plane ticket increases rapidly in the month before the plane flies due to the high demand faced by the airline.
Competition in the airline industry
Competition amongst the airlines could also bring down the airfare considerably. The popular Indian low-cost carrier, IndiGo, captured around 40% of the air market share in the last year. Cut-throat competition in the Indian fleet has also pushed the state-run airlines like Air-India to slash their prices.
The numbers crunched by the Directorate General of Civil Aviation (a state-run body that regulates the aviation in the country) suggest that the inferior pricing in Indian aviation market is majorly due to high competition experienced by the airlines. The strategy employed by the company to attract customers.
Early customers are generally more sensitive to prices, so the airlines reserve low-cost economy class tickets to attract them. The airline uses data from DGCA to compare the sales in the current year and in the previous year on a particular date. If the sales figures are better compared to the past, the airline's revenue department will raise the airfare and if the sales have plummeted, the airline would decide to lower the prices to attract more customers.
Time of travel
Another interesting factor which affects the prices of a plane ticket is the time of travel, which means that, if you book an early morning or late night flight, you'll be charged reasonably less as compared to an evening flight. This happens because the demand for bookings is generally less in those time slots.
Book early, but not too early
CheapAir.com published a study based on 917 million airfares to find out the best time to book flight tickets to get the cheapest deal. According to the report published by the company, flyers can avail the greatest deals on flights in the prime booking window. Early birds are generally considered to be at an advantageous position when it comes to booking, but according to the study, the prime booking window allows booking at even cheaper rates.
Prime booking window is considered to be the period between 3 weeks to 4 months prior to the departure date. So, if you're planning on booking a flight it's better to not fiddle until the last week. Booking a few weeks early is always a great idea.
Apart from the prime booking window, the study emphasized on the undesirability of booking flight tickets one week prior. This is because you'll need to pay a whopping Rs.14,000 extra on international flights(on an average!)
Seasonal changes affect the airfare, book during off-seasons to get the best deal
We come across many people who claim that there are days and seasons in which the flight tickets are the cheapest. The confirmation on which day has the cheapest planes flying out is yet to come out, but the best season to book for a plane ticket, if you're flexible with the date in which you're traveling, would be late August or early Spring.
Tuesdays and Wednesdays give you the best deals to fly out
While there exists a controversy surrounding whether there exists the cheapest day of the week to book flight tickets, there's no doubt about the cheapest day to fly! Tuesday and Wednesday are considered to be the cheapest days to take a flight. Sunday, for obvious reasons, is the most expensive.
Did you know that the average difference between international flight tickets on Wednesday and Sunday can shoot up to Rs.5000! That's enough to burn a hole in your pocket. So, every time you are booking a flight and you're reasonably flexible with the date, prefer flying out on Tuesdays or Wednesdays.
Don't be sluggish
Did you know that nearly 70% of the flight tickets booked in India are purchased less than 30 days before traveling? Except for the last-minute planners, most of the flyers tend to wait for the fares to go down. Figure out the prime booking window for the year and book your flight tickets right away!
While you're having second thoughts over the fare, there will be someone who would grab the low-fare seat. So, one of the primary rules while buying flight tickets is to be informed about the booking window when you can get the best deals.
Always compare the fares
Even if airline companies tend to get competitive, they always set different prices for the same route. Browse the official websites of these companies. Make use of any offers or discounts available on the website, if you're a frequent flyer.
For example, IndiGo is offering flight tickets at Rs.1200 on select routes on travel between 11th July to 22nd September and the booking closed on the 30th of June.
So, even if you have a habit of procrastination, you can get a good deal a few weeks before the day of the flight. Keep an eye on the websites for exciting offers on the flight tickets.