Are you having a tough time figuring out airline prices? If you are as confused as most people, you have come to the right place. It’s all a matter of understanding the monster you are facing on the runway to your flight.  Are you wondering why the seats on every Friday flight from New York to Seattle in March cost $975?  Or why the price of a flight from Minneapolis to Washington DC changes every time you go online? 

There are three forces at work in this business: competition between airlines, the demands of the market, and what seats are actually available. Keep in mind that even the higher echelons of airline management have trouble understanding the system.  So we will try to the best of our abilities to explain.  All the main airlines work with four travel reservation systems, owned by a few of these airlines.  These systems are constantly revising flight prices and the availability of seats. The airlines continually change prices in response to the demand for particular flights. When a certain flight is in demand, its price goes up. When another flight is not doing well, the price goes down until the demand for it increases.  As you can see both prices and the access to a seat on the flight you want change by the hour, even by the minute. 

A few points to remember:

• Travel agents and internet sites all use the same central systems for reservations.  The four systems are not updated simultaneously, which can explain why every time you search for travel prices online, you get a different answer. 
• The science of supply and demand explains why prices are lower on weekdays or the middle of the night. If everyone wants a Saturday flight, then the Saturday price is obviously higher. Competition is important in this business.  One airline lowers prices on a flight from Chicago to Boston; you will likely discover that most of the others have done the same thing.
• There are all sorts of reasons why fares cost different prices for the same flights on different airlines.  If one of the airlines has a big share of the passengers, they won’t lower prices while another will – in order to get the potential flyers to fly with them.
• Airlines also play with their inventory of seats.  They divide up seats on their flights and set different prices for each group of seats.  Then they advertise the lowest price (of course) which lures you, the customer looking for a cheap flight.  But when you call, those seats are taken, and you are offered a higher price.  Depending on how the seats are selling, they often raise and lower prices like a see-saw.