Searching via your browser’s incognito mode or using a VPN to pretend you live in a different location – if you try to snag cheaper flights using popular hacks like these, it’s largely a waste of your time.
That’s according to a new study that investigated how air fares are determined at a major U.S airline. Dylan Walsh, writing on the Haas School of Business, UC Berkeley website, explains that the pricing system that the research discovered – which is typical to airlines around the world – is contrary to what most travellers would expect it to be.
The study was co-authored by Olivia Natan of Berkeley Haas School of Business, who told Walsh: ‘There are so many hacks out there for finding cheaper airline tickets. But our data shows many of these beliefs are wrong.’
Firstly, the study found that airlines don’t consider how customers try and find a balance between convenience and price with their flights – sometimes sacrificing convenience for a cheaper ticket. Instead, they decide on the price of seats on every individual flight separately, ‘even though changing the price on one flight will affect the way people think about all their options’, Natan told Walsh.
Secondly, the study found that airlines have a small, fixed menu of prices that they allocate to tickets on every flight, with large gaps between each price, Walsh reports. He says: ‘They may sell the first 30 economy tickets at the lowest price, and then the next 30 tickets at the next possible price, and so on.’
Trying to snag cheaper flights using popular hacks is largely a waste of your time, a new study has revealed
The study found that even if the carrier would like to boost the price of a ticket by £80 ($100) they only do it around one-fifth of the time, in order for the the figure to fit into this menu of pre-set prices, Walsh reports.
Thirdly, the study discovered there’s a ‘lack of coordination’ across airline departments. Natan told Walsh that airlines’ pricing teams ‘choose the menu of prices without using their internal demand predictions’, which can result in underpricing of tickets.
However, ‘the revenue management team corrects much of this underpricing before it ever reaches consumers’, Walsh reports, explaining that the team uses demand forecasts to decide on final prices, so that the number of underpriced tickets shown to customers is significantly reduced.
Flight prices go up significantly in the three weeks before a flight, the study reveals
That said, there is one silver lining for bargain-hunting travellers – Natan, who conducted the research alongside academics from the University of Chicago, Yale, and the University of Texas at Austin, told Walsh that there is a set window of booking time to avoid if you want to secure better value fares.
Natan told Walsh: ‘What I can say is that prices do go up significantly 21, 14, and seven days before a flight. Just buy your ticket before then.’
The study comes amid reports on ‘calculated misery’ – a theory that airlines could be making the customer experience deliberately bad in the hopes that passengers will spend more money on services that used to be free, such as baggage costs and seat selection.
Columbia Law School professor Tim Wu first coined the phrase ‘calculated misery’ in a 2014 piece for the New Yorker, where he described an effort by the airline industry to boost profits by making baseline products low quality, then offering upgrades for a fee.
He said: ‘In order for fees to work, there needs be something worth paying to avoid. That necessitates, at some level, a strategy that can be described as “calculated misery”.’