eli5: How do airline pricing algorithms work in general?

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Assume each airline different, but they clearly track each others’ prices, and certain market dynamics/forces/availability levels seem to cause the algorithms to get derailed into nonsense land. Ex: I am looking at flight from between two cities 1000km apart. a month from now i see $159 dollar flights. looks like average in the 200s. this week, two airlines both show options tuesday and thursday. Airline A, tues nonstop economy: $1500 (lol), B $1300. thursday A: $670, B: $590.There is just no way anyone is buying for 1500 right? are there people out there (that can’t afford private) but hate money so much they are spending 1500 on a one hour flight? or do runaway algorithms actually cost airlines sometimes?

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Anonymous 0 Comments

Airline tickets tend to get more expensive the closer to departure, they are sold at different price levels depending on advance purchase, or length of trip. It doesn’t apply to every route or airline, but typically there are 21, 14, 7 (and sometimes 3) day advance purchase rules on fares. So a ticket 4 weeks out might be $200 but 20 days out would be $300. Buying a ticket last-minute is typically the most expensive.

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