How do you do that I hear you say? Don’t despair: we have all the answers. Here you can learn how airlines determine ticket prices based on factors like demand and supply, route popularity, seasonality, and operating costs.

How do airlines calculate flight prices?

Airlines evaluate several factors including route popularity given certain routes are inherently more expensive due to higher demand. They also look at seasonality. As we all know, travel during peak seasons always shoots up.

Competition is another factor if multiple airlines fly to the same destination, as well as fuel costs – which can significantly impact airline operating costs and ticket prices. Additionally, prices are also dependent on which sort of aircraft you fly on, ancillary fees, such as baggage and seat selection. And of course, whether you fly in economy, business or first.

How do airlines price their flights?

Travel is just like any other valuable commodity, and it’s priced so that when demand is low, prices are low, to stimulate sales. Likewise, when demand is high, prices are high to capitalise on the interest. To do this, airlines set up a pricing schedule for their flights, putting the seats into price ‘buckets,’ and as one ‘bucket’ fills up, they open the next, more expensive one up for purchase.

Does seasonality significantly affect flight prices?

Airlines rely on a degree of seasonality in travel and price their fares to balance the affordability of their flights, as well as their own profitability. Ticket prices fluctuate, and booking at certain times – for example, at the last minute – can be more expensive as there is less supply to meet demand. The best way to tackle these prices is to consider travelling during off-seasons, or booking well in advance.

Why do flight prices go up and down?

When you’re booking your next flight, it’s important to know that prices fluctuate. These price changes reflect how airlines react to sales and external factors, with the aim of filling up their planes. Contrary to popular belief, and very much similar to stock prices, flight prices are affected by sales numbers rather than search volumes. So no matter how many times you hit the refresh button on a particular route, know that you’re not driving up the price by doing so.

More travel hacks to help you bag a bargain with Skyscanner’s VP of Strategy:

Dynamic pricing alerts

“Setting up price alerts will ensure you’re the first to know as prices drop with any additional discounts or added supply. You can mark a flight you’re interested in and Skyscanner will email you whenever the price goes up or down.”

Make the most of demand and supply

“Flight prices are all based on supply and demand. Because some dates are more popular than others, prices will vary. Skyscanner’s ‘whole month’ search tool allows you to see cheap flights immediately and pick the right deal for you. Consider traveling a day before or a day after your original departure dates — flying on less popular days of the week is always cheaper.”

Keep an open mind

“Swapping your usual break in Cancun for Portugal could be an unexpected delight. So let the algorithm decide with a search to ‘Everywhere’, which will present a plethora of options based on your travel dates, all ranked by price”

Mix & match

“Fares do not have to be booked as returns — look at flying out with one airline and back with another.”