Sponsor Message:
Travel Polls & Prefs Forum
My Starred Topics | Profile | New Topic | Forum Index | Help | Search 
Airline Pricing - Human Analysit Vs Computer  
User currently offlinetonytifao From Brazil, joined Mar 2005, 1014 posts, RR: 0
Posted (2 years 10 months 2 weeks 3 days 9 hours ago) and read 3635 times:

I know that air fares pricing is much like "rocket science", so hard to understand.

I was wondering how much of airline pricing is based on Human Analysts vs Computer.

It just seems airlines jack up their prices on last minute flights even though loads are very, very, very low.

Take for example, 2 days ago, I had a reservation on hold with AA from MCO to CNF and back for priced at $500 each way, so total base of $1000. Since I was not sure I could be making the trip this weekend, I could not extend for the same price. The fare is now $870 each way. Fare went up nearly 75% in one day. I have to guess this is a computer generated and not a human pricing. I refuse to pay this difference when flight loads are low.

If this is the case, I was wondering if more investment on human analysts to adjust pricing could increase airline revenues.

What do you all think?

Thaks,
Tony

6 replies: All unread, jump to last
 
User currently offlineal2637 From Ireland, joined Oct 2006, 407 posts, RR: 3
Reply 1, posted (2 years 10 months 2 weeks 3 days 8 hours ago) and read 3520 times:

How can you tell the load is low?

Typically fares are set by humans, availability is set by computer, using heaps of input factors (historical data, flight loads, etc etc)


User currently offlineredhair From Spain, joined Apr 2011, 45 posts, RR: 0
Reply 2, posted (2 years 10 months 2 weeks 3 days 5 hours ago) and read 3319 times:

As an Revenue Analyst I can tell it depends on the airline.

I think it's FR who has only two revenue analysts for all their routes (please correct me if I'm wrong) so everything should be pretty much computerized. However, in other airlines you do have systems that change prices but you do control almost every change made by the system. These systems are aimed to adjust your price when you're not at work.

As it refers to the price a few days before the departure it also depends on the airline. Some airlines keep low prices (sometimes it's even cheaper to buy your ticket 1 day before departure than 5 days earlier) and some others put higher prices... High prices even with really low loads make sense if you keep in mind that most of the people do not plan holidays on the same day or just a couple of days in advance. So, those who really need to fly are willing to pay a higher price as they are looking for "transportation from A to B the next morning". On the other hand, if you are looking for a good price, you are willing to change your departure date if that allows you to save a couple of hundred bucks.


Redhair


User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 3, posted (2 years 10 months 2 weeks 3 days 5 hours ago) and read 3278 times:

Quoting tonytifao (Thread starter):
Since I was not sure I could be making the trip this weekend

Since you couldn't "commit" to your trip, neither did the airline "commit" to their price. In most cases, price will go up after that if availability is still there. It's a revenue generator since the airline got you pretty much cornered if you still have to go that particular day. If you are flexible on your travel dates then those walk-up fares weren't meant for you in the first place.

Even on an empty airplane, most airliners wouldn't deviate from this strategy. Otherwise the long term trend would be that all customers will wait until the final days to book their travels.

It sounds inefficient but in a way it's not. It's all about supply/demand with a fixed amount of seats. It's a nice way to make your employees happy (which also helps the bottom line) and just give them away...



Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
User currently offlineskymiler From United States of America, joined Aug 2007, 523 posts, RR: 1
Reply 4, posted (2 years 10 months 2 weeks 3 days 4 hours ago) and read 3259 times:

Quoting peanuts (Reply 3):
Even on an empty airplane, most airliners wouldn't deviate from this strategy. Otherwise the long term trend would be that all customers will wait until the final days to book their travels.

Just ask TWA what happened when they did super cheap TATL stand by/day of flight fares out of JFK many, many years ago! Almost whole plane was full of $99 standbys!



I love to fly, and it shows!
User currently offlinetonytifao From Brazil, joined Mar 2005, 1014 posts, RR: 0
Reply 5, posted (2 years 10 months 2 weeks 3 days 3 hours ago) and read 3138 times:

Thanks for all the responses. It seems like it's a 3 day advance purchase fare. One some routes, I say; let the computer do the job, for instance, MIA-GRU. Other routes like MIA-CNF, I just don't see many people buying last minute high fares.

The intent of my posting was to see how much computer vs human the price altered.


User currently offlinepeanuts From Netherlands, joined Dec 2009, 1438 posts, RR: 4
Reply 6, posted (2 years 10 months 2 weeks 3 days 3 hours ago) and read 3065 times:

Quoting tonytifao (Reply 5):
The intent of my posting was to see how much computer vs human the price altered.

Does it really matter? Who ultimately "controls" the computer?
I don't think airlines simply purchase out-of-the-box software for this and just cross their fingers. Even if software "controls" pricing, analysts behind the computer control the input. I'm sure most carriers have their finger on the pulse, so to speak...

[Edited 2011-09-15 06:44:03]


Question Conventional Wisdom. While not all commonly held beliefs are wrong…all should be questioned.
Top Of Page
Forum Index

This topic is archived and can not be replied to any more.

Printer friendly format

Similar topics:More similar topics...
Airline Size Vs National Population: Who's Best? posted Sun Jun 22 2008 02:03:35 by Henkybaby
Military Vs. Civilian Route To Airline Pilot posted Mon Apr 28 2008 07:20:01 by KochamLOT
Another Airline Vs Airline Poll... posted Thu Dec 28 2006 20:03:36 by FCAFLYBOY
Airline Loyalty Vs. Ticket Prices posted Thu Mar 17 2005 20:18:49 by Thrust
Airline UK Vs Airline USA posted Mon Nov 29 2004 03:29:50 by Catatonic
Funniest Airline Commercials posted Tue Sep 6 2011 15:20:00 by usscvr
CO Vs LH In Business Comparison posted Tue Sep 6 2011 09:44:47 by DFWHeavy
Airline Liveries Communicate What? posted Sun Aug 21 2011 11:39:22 by VC10er
Planes Vs Trains Across Europe? posted Thu Aug 18 2011 18:22:41 by B737900
Airline Policies On Nail Varnish posted Tue Aug 16 2011 05:48:28 by Quokka