Airfares can be a confusing, complicated thing. That can be deliberate by design to increase profits, and sometimes is just a result of the huge amount of logistics involved. But, the basics of how airfares work are relatively straightforward, and knowing that can make a big difference next time you need to book a flight.
Let’s start with the basics. As you may be aware, instead of one fixed-price ticket for everyone, the price of an air ticket fluctuates. That’s why you can check a price one day and have it jump up the following day. But, how that system actually works is worth a bit of looking into.
On a side note, if you notice that the airfares you are constantly refreshing online are increasing, try looking at them in a private window or incognito mode. It has been stated (we can’t prove it) that these websites track your visits and notice that you are interested, so can manipulate the price to get you to book it faster. Untracked windows and clearing your website cache can stop this from happening.
To break down the airfare system, it’s time to head to the bar. In fact, imagine you own the bar, and it is a busy Saturday night. You have 26 bottles of alcohol to sell, and each bottle provides about 10 standard drinks. Instead of pricing your drinks at a set rate according to the alcohol, you decide to do something different. You are going to instead charge your drinks according to the bottle, and work it up sequentially. So, each bottle is given a letter from A to Z, and each one is priced in increasing amounts. You start with the A bottle, a bargain at only $5 a drink. When that runs out, the next bottle you pour from is the B bottle, priced at $7 a drink. And so on, up and up you go. Instead of pricing each drink equally, you are pricing them on the value of the remaining stock. When the bar is about to close, there is often a rush as desperate people try to get their last drinks in before moving on. Those drinks might be from the Y bottle (at $53 a drink!) and that desperation means that they are paying a lot more than the first drinks of the night.
In a nutshell, that’s how airfare pricing works. There isn’t a difference in the alcohol in the bottle, and there isn’t a difference in the seats on the plane. You might be sitting next to someone who paid twice as much as you on one side and a lot less on the other. But what happens when the airline reveals ‘special sales fares’ that annoyingly come out cheaper than the ticket you have already purchased? That is often a case of someone hiding a bottle under the bar (let’s say the G bottle) and skipping straight in the sequence from F to H. And then, when things are quiet and need a little kick, they conveniently find the G bottle, discount it and there is a rush of sales on the mid-priced drinks.
It does get a little more complicated when someone does want a different seat, like a business class seat. Well, in that case, we’d fill the C, D, I, and J bottles with higher-end alcohol and move them to the top shelf. The pricing system works the same, but it starts at a higher price level. In this case, the C bottle is worth $200 and the D bottle is $250. Again a bottle may be held back here for discounts and sales. Premium economy works the same but with the W and T bottles. In the end, what happens is that we still have 26 bottles, each with 10 drinks, but they are all priced separately according to their shelf and their order in the sequence. In airfares, these bottles are called the fare class.
When you look at flights online, you see things like “Economy Saver” and “Economy Flexi” seats. But, to see the magic at work, you need to see it all from a travel agent's point of view. Like peering into the matrix, you can see the bottles themselves and how many drinks are left in them.
Let’s look at a snapshot of a real flight window from Sydney to London, kindly provided from one of our air experts.
You can see all the basic information here. There is the date of the flight, the time zone difference and the routing. You can also see the airlines in question (BA being British Airways and QF being Qantas) and departure/arrival times.
But most importantly, remember those letters on the bottles we mentioned earlier? They are exactly the same in real life. It reads from left to right, from most expensive to least expensive. First class, if the airline has it, is F and A. Business class is actually allocated as C, D, I and J, with J being the most expensive fare class. Premium economy is W and T. In Economy, you can see all the options ranging from Y to E/G, with Y class being the most expensive fare class. Both J in business and Y in economy are known as ‘full fare tickets’, meaning they are the most expensive as zero discounts apply. Airlines don’t show more than 9 available seats in any fare class, so whilst there might be more in each of them, the most you will see is 9.
Looking at this snapshot you can see that in the first flight, the 1 with BA, the business class is completely sold out. In fact, the plane is pretty full with only 7 seats in Y left, 5 in B and 1 in H. So, around 13 economy seats left, up around the higher end of the price bracket. However, option 3 with Qantas has more availability, with some full-fare business seats (J) and at least 81 seats in economy. You might also notice that V is sold out on this flight ahead of S, N and Q. This fare class is the deep discount fare class (the hidden bottle under the bar), so either they have been sold already as part of some sale.
So, when your travel agent is putting an airfare together, they are searching for the cheapest suitable fare class for your journey, often comparing airlines like this to see which one will work best. They also have to then compare days, and also combinations of flights. It’s a lot of work. You often can’t combine the fare classes, so an L on one flight can’t combine with an H on the next connecting flight. So, this means you either need to find the L class all the way through or pay extra to have the H class all the way through. Obviously, the most direct and easiest flights are the first to go. This is why some days are more expensive than others, or why choosing a less convenient connecting flight may sometimes mean a cheaper fare, as you might be able to get a lower matching fare class on it. As for the “Economy Saver” or “Economy Flexi” categories you might see when you are looking at flights online, well that is just a sales grouping of a few fare classes with similar fare rules. Even without knowing the specifics, the Y/B/H classes would be the most expensive economy fares and therefore most flexible, so they are probably the ‘Flexi’ fares you see. The cheaper the seat, the more restrictive the conditions.
Another side note: Some online airfare aggregators are known to offer airfares that actually can’t be combined. If you ever come across an airfare that is miles cheaper than everyone else, it can often be a case of a program used by these online merchants miscalculating the airfare and combining fare classes. When this happens and you go to book the great deal, you can often see the price suddenly increase when it is recalculated. Worse off, sometimes you book it only to have the website cancel the ticket (because they can’t actually build it for you) and offer you a credit instead, only to be used with them, on another departure. This has been cracked down on in recent years, but still happens. With all of this in mind, you can really start to see the value of using an travel agent or air expert when you are looking at flights, especially if they are more than just point to point departures. Not only can they find the right fare, on the right departures, with the correct conditions, but they are also there if things go wrong. Good luck trying to get an algorithm on the phone if you miss a flight.
A couple of other things to note that you can use when looking at flights. The airline code tells you the airline, but the flight number often tells you how important that flight is to the airline. There are no fixed rules, but typically the number 1 is allocated to their flagship flight. QF 1 in this case is Sydney to London, their ‘flagship’ route. BA doesn’t consider Sydney that important, way down at 16 here. How awkward. Their flagship flight BA 1 was reserved for the Concorde flight from London to New York and was retired for many years. VA 1, Virgin Australia’s flagship flight, is from Sydney to Los Angeles. And with the return flight often the following number (VA 2 being the return Los Angeles to Sydney flight and QF 2 being London to Sydney), you can start to see a pattern.
In addition to all of this, if a flight is heading north (or secondly, west) then the flight number is often odd. If it heads south (or secondly, east), it is often even. So, a Qantas flight to Perth can be QF 653 and the return journey is QF 654, not the inverse. And there is more: if the flight number is four numbers in length, then you are usually on a regional airline, meaning a smaller plane with fewer seats. These planes don’t always follow the north/south number standard, but the size of the flight number is inverse to its “importance” and therefore means a smaller plane.
There are exceptions to these rules, as always. American Airlines operate AA1776 between Boston and Philadelphia, the year of the Declaration of Independence. And a few airlines operate flight 777 into Las Vegas (lucky 7’s anyone?). But generally, the bigger the number, the fewer seats on the plane. The lower the number (down to 1), the more important the route. And, north/west is odd, south/east is even.
Like everything in travel, look under the surface and you have layers of complexity all designed to help move millions of people around the world. On a plane, everyone may have different seats, and different fare conditions and would have paid different costs, but ultimately we are all hoping to end up in the same place. It’s a nice comparison to what we find when we get to that end destination.
We find that no matter where we travel, and all our differences between various cultures, most people in the world have the same general dreams for their lives. The same end goal of a better life for them and their family. In the end, we are all hoping to get to that end destination safely, and maybe have a good meal on the way.
