![](\"https:\/\/cdn.images.express.co.uk\/img\/dynamic\/25\/590x\/secondary\/flight-prices-hunting-cheapest-plane-ticket-waste-of-time-5011257.jpg?r=1697220488188\")
<\/p>\n<\/p>\n
Trying to save money by hunting online for the cheapest plane ticket is just a \u201cwaste of time\u201d \u2014 and travellers would be better off just booking their flight as early as possible.<\/p>\n
This is the conclusion of marketing expert Professor Olivia Natan of the University of California Berkeley and colleagues, who studied how a US airline prices seats on flights.<\/p>\n
Commonly cited tricks like browsing in incognito mode, shopping on a particular day of the week, or using a VPN to fake a different address do not work, the team said.<\/p>\n
Natan explained: \u201cThere are so many hacks out there for finding cheaper airline tickets. But our data show many of these beliefs are wrong.\u201d<\/p>\n
In fact, the team said, the system the team found at work \u2014 which they said is representative of airlines all across the globe \u2014 is strikingly different from what both consumers and economists might expect.<\/p>\n
For all the latest on news, politics, sports, and showbiz from the USA, go to Daily Express US<\/strong><\/p>\n READ MORE: <\/strong> ‘The worst hotel I have ever stayed in \u2014 I couldn’t leave fast enough’<\/strong><\/p>\n On the findings, Natan commented: \u201cWe initially didn\u2019t know how to rationalise the things we were seeing.\u201d<\/p>\n The team compares the situation with shopping for products at a store. If a company raises the price on a product \u2014 strawberry jam, say \u2014 this can affect sales of both strawberry jam and similar products that people might turn to instead, like raspberry jam.<\/p>\n A similar thing can happen, the researchers explain, when people browse for airline tickets online. Presented with a wide range of different flights from the same airline, people tend to make purchase decisions based on a balance of convenience and price.<\/p>\n For example, people might elect to travel at a slightly less convenient time \u2014 first thing in the morning, or late at night, for example \u2014 if that flight is sufficiently cheaper.<\/p>\n However, Natan noted, \u201cairlines don\u2019t consider this kind of substitution.\u201d Instead, they tend to consider the prices of seats on each individual flight, rather than the total number of seats sold in a given day.<\/p>\n They do this, she added, \u201ceven though changing the price on one flight will affect the way people think about all their options.\u201d<\/p>\n Similarly, airlines do not tend to factor in the prices being offered by their competitors in their automated price-setting \u2014 effectively suppressing the benefits of a competitive market.<\/p>\n The reason for this is that airlines use a particular pricing strategy \u2014 known as Expected Marginal Seat Revenue-b \u2014 which outputs blocks of seats for each fare class.<\/p>\n But Expected Marginal Seat Revenue-b comes with certain quirks.<\/p>\n We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info<\/p>\n DON’T MISS: <\/strong> When putting values to tickets, airlines have a fixed and relatively limited number of prices they can assign.<\/p>\n So, for example, they may sell the first 30 economy tickets at the lowest price, and then the next 30 at the next price, and so on.<\/p>\n The difference between this and pricing in other consumer sectors \u2014 where charges can be adjusted up and down by the smallest increment of currency \u2014 is that airlines and other businesses in the travel sector operate on a model that has large gaps between each possible price.<\/p>\n Natan said: \u201cAirline tickets are sold through global distribution systems that make such a travel agent in Wichita sees the same price as you do on your computer at home.\u201d<\/p>\n What this all means is that if an airline might like to increase the cost of a given seat \u2014 as to maximise profits \u2014 they typically can\u2019t unless the increase reaches the next fare band.<\/p>\n To an economist, this might seem bizarre, as one would assume that companies would inherently want to increase prices, without constraint, as long as such also upped revenue.<\/p>\n As a result of the discrete pricing, Natan said: \u201cWe talked to all of these managers who said the pricing team doesn\u2019t know what it\u2019s doing!\u201d<\/p>\n Airlines, she added, \u201ccould make more money today by selling fewer tickets at higher prices and not foreclosing future opportunities.<\/p>\n \u201cIn practice, they seem to be choosing the menu of prices somewhat arbitrarily.\u201d<\/p>\n While revenue management teams do sometimes correct the underpricing, this only occurs in 60 percent of cases.<\/p>\n According to the team, the reasons behind this might include efforts to build customer loyalty or to avoid regulatory security.<\/p>\n In the near future, the team said, airlines might begin to broadly adopt more dynamic pricing systems.<\/p>\n One such approach, which some firms have been trialling, is known as \u201ccontinuous revenue management\u201d \u2014 and involves assigning different prices to individual seats on a given flight.<\/p>\n Natan said: \u201cThat would make pricing significantly more variable \u2014 but even that would not be the kind of targeting that many consumers assume airlines use.\u201d<\/p>\n In the meantime, however, the best strategy for the economical traveller is to book early \u2014 and never leave making flight reservations until the last minute.<\/p>\n Natan concluded: \u201cWhat I can say is that prices do go up significantly 21, 14, and seven days before a flight. Just buy your ticket before then.\u201d<\/p>\n The full findings of the study were published in The Quarterly Journal of Economics.<\/p>\n Follow our social media accounts on https:\/\/www.facebook.com\/ExpressUSNews and @ExpressUSNews<\/strong><\/p>\n Source: Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"![](\"https:\/\/cdn.images.express.co.uk\/img\/dynamic\/25\/590x\/secondary\/prices-airline-ticket-5011259.jpg?r=1697220488229\")
<\/p>\n![](\"https:\/\/cdn.images.express.co.uk\/img\/dynamic\/25\/590x\/secondary\/airline-cabin-seats-5011258.jpg?r=1697220488260\")
<\/p>\n
Five science-backed techniques to help travelers sleep on a long-haul flight[INSIGHT] <\/strong>
ESA video takes people on a breathtaking flight over Mars’ \u2018labyrinth of night\u2019[REPORT] <\/strong>
Lasers could be used to help lay roads across the surface of the Moon[ANALYSIS] <\/strong><\/p>\n![](\"https:\/\/cdn.images.express.co.uk\/img\/dynamic\/25\/590x\/secondary\/plane-taking-off-5011260.jpg?r=1697220488304\")
<\/p>\n