I *know* that nobody can predict prices but ....

I have been scoping out prices for UK to Florida next October for a couple of weeks now (using prices for this October, obviously, as next October won't be out for a while). Was truly freaked to find that yesterday, prices for my travel date had dropped by nearly $150 per person. That seems to suggest that waiting until the last minute (well, a month in advance) might be a good thing. But I'm just not a last minute person. The concept just scares me (I'm struggling a bit with having to wait til November when the flights come out!).

So, I'm not going to ask "is it better to buy November 2012 or September 2013?" cos I know that nobody can give me the answer to that. But I do want to know, in your experience is it a common thing for prices to drop one month out, or is that very unusual? I'd always imagined that getting a last minute plane ticket would be a very expensive way to do it. (although I've just realised that one month out may not count as very last minute for some experienced travelers! But it is to me!)

I have been scoping out prices for UK to Florida next October for a couple of weeks now (using prices for this October, obviously, as next October won't be out for a while). Was truly freaked to find that yesterday, prices for my travel date had dropped by nearly $150 per person. That seems to suggest that waiting until the last minute (well, a month in advance) might be a good thing. But I'm just not a last minute person. The concept just scares me (I'm struggling a bit with having to wait til November when the flights come out!).

 

So, I'm not going to ask "is it better to buy November 2012 or September 2013?" cos I know that nobody can give me the answer to that. But I do want to know, in your experience is it a common thing for prices to drop one month out, or is that very unusual? I'd always imagined that getting a last minute plane ticket would be a very expensive way to do it. (although I've just realised that one month out may not count as very last minute for some experienced travelers! But it is to me!)

Someone else's experience really has no bearing on the prices you can expect to see. Different travel dates, different city pairs, different world and economic situations going on......

But if you're just waiting for one person to say yeah, I've seen prices drop a month out a couple of times, (so that you can feel comfortable taking a chance on waiting til the last minute) then I'm sure someone will oblige you.

:-) if anything, the opposite - I'm terrified of waiting til the last moment, I'd probably rather somebody said "don't be ridiculous, that's a really bad idea" (but I expect I can find someone to oblige and do that, too ;-) )

Better is to figure out the average price for your route and timeframe. Then you will know a good deal when you see one. Generally I would not buy my ticket 11 months in advance. Buy your ticket when you feel the price is fair. Then if the price drops by even $500 you can say you got a fair price.

I have been scoping out prices for UK to Florida next October for a couple of weeks now (using prices for this October, obviously, as next October won't be out for a while). Was truly freaked to find that yesterday, prices for my travel date had dropped by nearly $150 per person. That seems to suggest that waiting until the last minute (well, a month in advance) might be a good thing.)

It doesn't suggest anything. Flying TATL I've never found a cheaper price one month away from the flight than when I've purchased well in advance. By that time, the lower fare buckets are all sold out. But that's just for my routing and dates, so who knows what it will be for yours. frugaltraveler and waterbug123 are right.

Also, most airlines will not open schedules for October 2013 until sometime in Dec. 2013. I also wouldn't purchase right away.

Totally understand your feelings--I'm the same way. My strategy is to have a price in mind (based on traveling back and forth to the UK for 40 years) and book early so that I'm not constantly checking. This way I get the seats that I like. If the price goes up or down so be it -- I pay the value of the flight for me. I know that schedules can change but always know what options are available if that occurs.

Any investment adviser will tell you that trying to "time the market" is a fool's game. Thinking you can buy at the bottom, or sell at the top assumes an understanding of a marketplace that is too volatile and too complicated to be understood even by those who make a living at it.

Airfares are set dynamically - that means they change constantly. They will fluctuate day by day, even hour by hour, as the airlines' computer systems look at scores of data points, then apply that data to very complex computer algorithms that imagine "what if" scenarios 24/7. They do this faster and more thoroughly than anyone can imagine. They look at fuel costs and oil futures; at load factors (percentage of seats occupied) flight-by-flight and day-by-day. They look at weather forecasts and trends, how many seats competitors have on similar routes, how much other airlines are charging for what types of seats carrying what types of restrictions, historic demand, the global economy, and on and on... When the programs see a combination of factors that suggests a change in fare can improve the airline's profits, the change is made, badda-bing. Then it's reviewed twenty seconds later, and twenty seconds after that...

So your task as a consumer, one of millions of potential passengers/customers, is to use the only data point you have in the face of all this automation: What works for me?

A couple of guidelines that can help you in your search. First, think like any company. The one factor that companies hate is uncertainty of costs. It's September 2012. How much will a gallon of Jet-A fuel cost in a fuel contract signed in July, 2013? How can you know? Answer, you really can't, but if the price you charge passengers is based in some part (a big one, actually) on the cost of the fuel that passenger/seat consumes, what benefit is it to you to base that fare on the assumption that oil prices will fall sharply between now and July? Isn't is safer to assume that they'll go up instead? At least that way, you won't have to suffer a relative loss on the passenger/seat.

Now by April of 2013 you'll probably have a much clearer idea of what fuel will cost in August. So if fuel has gotten cheaper, you can drop the price on your unsold seats and maybe get a few more people to buy tickets. Those that bought earlier and at the higher price won't be shopping any more, so the profit you made on their seats will still be safe.

But of course the price of oil (or salaries for pilots or flight attendants or bag handlers, or terminal rental to the airports, or maintenance costs or...) might have gone up more than you thought, so you don't lower fares, you raise them in hopes you can limit the possible loss. But raising them drives would-be purchasers away, leading to more unsold seats, so then you lower a little, watch and see, then adjust... you get it.

My own rule of thumb is this: I never buy tickets when they're first available (330 or 360 days out typically) because the "hedging" risk described above is too great. Buying them less than 30 days out is too close to flight date - most of the cheap seats are gone, leaving only the higher "fare buckets" left behind.

So buy them when you're comfortable with the price (in the context of the risk) and then close the book on the matter. You cannot "time the market." Instead, be an informed and thoughtful consumer, and think a little like a business that has a product that has no residual value the minute after the flight departs. What would BA do?

WELL PUT, Gardyloo. Both on the description of how pricing occurs and how to respond as a thinking consumer.

I'll bookmark this and either link or copy when these types of posts come up again. Which should be measured in months, but will instead happen within days. ;)

Any investment adviser will tell you that trying to "time the market" is a fool's game. Thinking you can buy at the bottom, or sell at the top assumes an understanding of a marketplace that is too volatile and too complicated to be understood even by those who make a living at it.

 

Airfares are set dynamically - that means they change constantly. They will fluctuate day by day, even hour by hour, as the airlines' computer systems look at scores of data points, then apply that data to very complex computer algorithms that imagine "what if" scenarios 24/7. They do this faster and more thoroughly than anyone can imagine. They look at fuel costs and oil futures; at load factors (percentage of seats occupied) flight-by-flight and day-by-day. They look at weather forecasts and trends, how many seats competitors have on similar routes, how much other airlines are charging for what types of seats carrying what types of restrictions, historic demand, the global economy, and on and on... When the programs see a combination of factors that suggests a change in fare can improve the airline's profits, the change is made, badda-bing. Then it's reviewed twenty seconds later, and twenty seconds after that...

 

So your task as a consumer, one of millions of potential passengers/customers, is to use the only data point you have in the face of all this automation: What works for me?

 

A couple of guidelines that can help you in your search. First, think like any company. The one factor that companies hate is uncertainty of costs. It's September 2012. How much will a gallon of Jet-A fuel cost in a fuel contract signed in July, 2013? How can you know? Answer, you really can't, but if the price you charge passengers is based in some part (a big one, actually) on the cost of the fuel that passenger/seat consumes, what benefit is it to you to base that fare on the assumption that oil prices will fall sharply between now and July? Isn't is safer to assume that they'll go up instead? At least that way, you won't have to suffer a relative loss on the passenger/seat.

 

Now by April of 2013 you'll probably have a much clearer idea of what fuel will cost in August. So if fuel has gotten cheaper, you can drop the price on your unsold seats and maybe get a few more people to buy tickets. Those that bought earlier and at the higher price won't be shopping any more, so the profit you made on their seats will still be safe.

 

But of course the price of oil (or salaries for pilots or flight attendants or bag handlers, or terminal rental to the airports, or maintenance costs or...) might have gone up more than you thought, so you don't lower fares, you raise them in hopes you can limit the possible loss. But raising them drives would-be purchasers away, leading to more unsold seats, so then you lower a little, watch and see, then adjust... you get it.

 

My own rule of thumb is this: I never buy tickets when they're first available (330 or 360 days out typically) because the "hedging" risk described above is too great. Buying them less than 30 days out is too close to flight date - most of the cheap seats are gone, leaving only the higher "fare buckets" left behind.

 

So buy them when you're comfortable with the price (in the context of the risk) and then close the book on the matter. You cannot "time the market." Instead, be an informed and thoughtful consumer, and think a little like a business that has a product that has no residual value the minute after the flight departs. What would BA do?

Can this post be made required reading before anyone asks about predicting future air fares?

WELL PUT, Gardyloo. Both on the description of how pricing occurs and how to respond as a thinking consumer.

 

I'll bookmark this and either link or copy when these types of posts come up again. Which should be measured in months, but will instead happen within days. ;)

Indeed. Or hours.

I've never found a cheaper price one month away from the flight than when I've purchased well in advance. By that time, the lower fare buckets are all sold out. But that's just for my routing and dates, so who knows what it will be for yours. frugaltraveler and waterbug123 are right.

 

Buying them less than 30 days out is too close to flight date - most of the cheap seats are gone, leaving only the higher "fare buckets" left behind.

 

What they said. For a domestic fare, MAYBE. But I would never risk waiting til a month before to purchase an international ticket. Way too risky for this girl!

Thank you so much to everyone for their replies. I really was trying to avoid a "when should I buy my tickets" question lol. And in particular thank you to Gardyloo for your thought provoking and insightful post - you're quite right, how can any of us try to predict something that is as complicated and multi-factorial as this? And you're absolutely correct that the fares change hour by hour - I've seen them do it!

I'm going for a compromise of reasonably early but not the day of opening. I think the technique of getting an idea of a fair and acceptable price, and then buying when that price is available, sounds the best. And probably also totally avoiding flight pricing websites after booking - if the price goes down a lot, I don't want to know!

Hi CB140

All I will add is that BA and Virgin have sales around

April/may time. And Virgin usually have another one around this time of year.

Eg. Our flight to Orlando is £799 return as agains £923.

We tend to use Virgin these days as their Premium Economy

Is very good.