4 ms·

The models are optimized for the 99% of the cases without any special circumstance. Airlines overbook by x% because they know that a lot of people won't show up

by sdfx 16y ago

The models are optimized for the 99% of the cases without any special circumstance. Airlines overbook by x% because they know that a lot of people won't show up, they increase the price over time etc. I can see that an event like this can throw the whole system out of whack. It's not obvious how the parameters should be altered. Without any data about how many people will buy more than one ticket in a situation like this, predictions are impossible.

potatolicious 16y ago
> "they increase the price over time etc." Interesting note: I have a friend in the airline industry, and according to him time-to-flight has no effect on ticket price. Rather, airlines assign prices to seats - and sell from the cheapest first. So theoretically if nobody buys tickets to a flight, it will still be cheap even the day before departure.
- goatforce5 16y ago
  I guess different airlines have different pricing models, but other people have built businesses around predicting when airfare prices will fluctuate. See: http://www.bing.com/travel/about/howWorks.do http://www.bing.com/travel/about/howWorks.do (nee Farecast.com)
- dartland 16y ago
  Yes and no. Price is relative to demand. If the plane fills up ahead of expected, demand is assumed to be higher and prices will go up. If the plane is more empty than predicted, fares will fall. Competitor moves can also impact this. But even aside from that, prices go up as the cheaper fare classes get sold out. This isn't the airline raising fares, it is simply the cheap seats get sold out. Finally, there are fare rules. The cheapest fares generally have 14 or 7 day advanced purchase requirements. So without touching anything, fares will go up at those time increments as the cheapest fares are no longer available, even if seats are still available. This is to protect the airline from selling cheap seats to last-minute business travelers with a high willingness to pay.

by sdfx 16y ago

potatolicious 16y ago

> "they increase the price over time etc." Interesting note: I have a friend in the airline industry, and according to him time-to-flight has no effect on ticket price. Rather, airlines assign prices to seats - and sell from the cheapest first. So theoretically if nobody buys tickets to a flight, it will still be cheap even the day before departure.

goatforce5 16y ago
I guess different airlines have different pricing models, but other people have built businesses around predicting when airfare prices will fluctuate. See: http://www.bing.com/travel/about/howWorks.do http://www.bing.com/travel/about/howWorks.do (nee Farecast.com)
dartland 16y ago
Yes and no. Price is relative to demand. If the plane fills up ahead of expected, demand is assumed to be higher and prices will go up. If the plane is more empty than predicted, fares will fall. Competitor moves can also impact this. But even aside from that, prices go up as the cheaper fare classes get sold out. This isn't the airline raising fares, it is simply the cheap seats get sold out. Finally, there are fare rules. The cheapest fares generally have 14 or 7 day advanced purchase requirements. So without touching anything, fares will go up at those time increments as the cheapest fares are no longer available, even if seats are still available. This is to protect the airline from selling cheap seats to last-minute business travelers with a high willingness to pay.