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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Of course there are people spending that much.
The businessman who needs to fly over for a super important meeting *tomorrow* will easily pay that much or more.
Or heck, someone whose mom back in their hometown was just hospitalized, and if you don’t go back *now* you may not get to say goodbye to her.
If you book a flight with such short notice it’s usually because it’s capital-I Important. And in that case, you’ll often pay whatever it takes to get on the flight.
And airlines make good use of that. They make a guess at how many of the super-expensive last-minute seats they’ll be able to sell, and then assign lower prices to the other seats. They may have several such pricing tiers, to try to fleece every passenger for as much as they’re willing to pay. You need to sell some seats cheaply because there aren’t enough people willing to pay the higher prices and it’s better than leaving those seats empty. Then there are people who’ll pay a middling price, people who’ll pay a reasonably high price, and people who’ll pay WHATEVER YOU ASK. So they try to make sure as many passengers as possible fall into the high-paying categories, and then fill up the remaining seats with cheapskates.
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