Explained: How Do Airlines Calculate Your Flight Cost?

Whether you wish to travel within India or to abroad, flights are a key part of our journey, right? And the biggest task here becomes the booking of flight tickets. On some days the flight costs are much higher than the other days, whereas on some days they turn out to be much cheaper.

But how does this mechanism work? How are flight prices calculated? Let's try simplifying that for you.

How Are Flight Prices Calculated?

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Distance and demand are two key factors that determine flight ticket prices. 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, as per Skyscanner.

What Do Airlines Do When Pricing The Tickets?

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.

¡°Airline pricing models are complex, with tickets kept priced low enough so passengers can afford them, while keeping airlines profitable. Airlines use complicated algorithms to set their pricing, which weigh up determining factors including the nature of the airline (e.g., is it a low-cost carrier or premium airline), the itinerary, and the cabin class. These all have a bearing on how much the traveller pays for the ticket. However, there is one factor which outweighs all of these and is the ultimate determinator for the price paid: demand.¡° Hugh Aitken, VP Flights at Skyscanner, says.

Also Read: How Do Airports In India Earn Money?

Which Other Factors Affect Flight Prices?

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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 ¨C for example, at the last minute ¨C can be more expensive as there is less supply to meet demand, as per Skyscanner.

Generally, prices are higher during school holidays (Easter, summer holidays and half terms) and especially in the Christmas and New Year period ¨C although winter can be the cheapest time to travel, outside of the holidays. And try to book at least one to two months in advance of travel for the best prices.

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