This was published 4 years ago
Cheap flights: How airfares work and how to get the best price
By Michael Gebicki
Airfares can fluctuate wildly, but the reasons can vary.Credit: Shutterstock
Flight ticket prices often look like the devil's work. Ticket sellers tempt you with too-good-to-believe prices but then when you go to book there's a nasty surprise.
They go up, they go down – slightly less often – and your flight ticket always seems to end up costing more than you expected. Myths are born, and misconceptions abound – but a little understanding about the way airline tickets are priced goes a long way.
How airline prices work
While flight prices might look like they're constantly on a roller coaster ride, the mechanism is simple. Airlines set prices according to the laws of supply and demand. They aim to fill as many seats as possible at the highest price travellers are prepared to pay.
For a particular flight on any day, an airline will divide all the available seats into different price categories, or buckets. In order to decide how many seats to allocate to a particular price bucket the airline uses a databank that tells it what the demand is likely to be.
If it's an international flight in period of high demand, such as Christmas holidays, fewer seats are tipped into the cheapest price bucket. These are the first to sell. If it's a midweek domestic flight in the middle of the day on a route with heavy competition, expect many more seats in the least-cost bucket.
Consolidators v aggregators
Flight search engines that show you multiple options from various airlines are either consolidators or aggregators. Consolidators are wholesalers that buy big blocks of airline tickets and sell them at a lower price than the airline's own published fare. Among the most common consolidators seen on websites selling to Australian flyers are eDreams, CheapTickets and mytrip.com.
Aggregators cast a wider net, looking at the fares offered by various consolidator websites as well as the airlines themselves to give you an overall picture of what flights are available at various prices. Expedia, Skyscanner, Kayak and Momondo are among the most popular aggregators. Rather than actually selling tickets, the aggregator takes a commission when you click the link on their website that takes you through to a consolidator or an airline's website. Since they pay little or no commission, budget carriers' flights will not usually show up on an aggregator's website.
While the cheapest fares will usually be those offered by consolidators they also come with more conditions and restrictions than if you buy the same seat from the airline itself. You may not be entitled to frequent flyer points or advance seat selection and any changes to your itinerary will likely involve a stiff penalty.
Consolidators operate with minimal staff and customer service is virtually non-existent. A flight ticket bought from a consolidator is not the same as a ticket purchased from the airline. Check the price offered by the airline as well.
Will clearing cookies give a better price?
It's no secret that airlines and Online Travel Agents (OTAs) track you using cookies when you visit their websites. So when you revisit that same site to recheck a flight and the price has jumped, it's tempting to believe that the increase happened because that website has worked out that you're a serious buyer, and therefore they're applying the squeeze, but that's not the case. Airline ticket prices vary depending on supply and demand, not according to search numbers or the number of times you might have looked at a certain fare.
Similarly, it's never been proven that the type of device you're using to access the website or the average wealth of the suburb you're operating from has a bearing on ticket price. Accessing an OTA via a high-end iMac in Toorak will show the same price as if you do it via a 10-year-old desktop in a less well-endowed suburb.
Does it make a difference if I search using a VPN?
Searching over a Virtual Private Network (VPN) conceals your IP address, and therefore makes it impossible for an OTA to know where you're based or whether you've visited the site before. However the ability to change your location so it appears you're based in Toronto or Frankfurt rather than Melbourne will not have a significant impact on the price you pay.
While it can happen that you might be offered a different price from that offered when the OTA recognises you as an Australia-based client, that's down to the currency exchange rate. It's not been proven that flight tickets are significantly more expensive across the board if your location is identified as Switzerland rather than Indonesia.
Does cheap ticket Tuesday apply?
According to Skyscanner's US website and based on its data, the cheapest day to buy flight tickets is Tuesday morning.
"Typically, you'll save somewhere between 15 and 25 per cent," says Skyscanner. That may be so for US flights but there's no evidence to support this is the case of Australia.
A better way to find a cheap ticket is by setting airfare alerts. Skyscanner and Kayak have Price Alert, Momondo calls its Fare Alert but they do the same thing, which is to let you know when the price for your selected airline route moves up or down.
Can I score a bargain if I book late?
Airlines don't have last-minute fire sales to fill empty seats. Even if there are still plenty of vacant seats on a flight, ticket prices ramp up as flight time approaches, and these high-yield seats are a big win for the airline.
Airlines would prefer to travel with empty seats rather than filling those seats with low-fare passengers.
Does a round-trip ticket give the best deal?
That's usually true if you're travelling long-haul where there is no other reasonable choice apart from a legacy carrier. Not if you're flying aboard one of the low-cost carriers, which sell tickets sector-by-sector, with no penalty for a one-way booking.
See also: The 11 common mistakes we make when booking flights
See also: What you need to do if you miss a flight
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