Even the same flight going up and down confuses me. I can understand the price raising as demand for that particular flight goes up, (even though that’s a dumb system) but why would it go back down?
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It’s better for an airline to sell a seat for $10 than to have an empty seat when the plane takes off, because $10 > $0 and the plane is going to fly regardless.
Imagine you have a flight that you’re selling tickets for at $200 a piece 2 months before the flight is set to take off. People who need to get on that flight will just buy the ticket. But now imagine it’s 2 days before the flight takes off and you still have 30 empty $200 seats. The airline can either keep those seats at $200, but it’s unlikely they sell because they already had two months to do so, or they can lower the price and hope people jump on a last minute flight for $100.
If they don’t change the price, the plane takes off with 30 empty seats that they got paid $0 for. If they lower the price, there’s a chance people buy up those seats. It’s better having someone in that seat for a lower price than not having anyone in that seat at all. An airline generally can’t just cancel a flight if they don’t get enough paying customers on it. So it’s always better to have someone in the seat regardless of the cost than no one at all.
It’s the same for any event where the value disappears as soon as the event ‘starts.’ If you’re putting on a concert and it’s not sold out, you’re better off selling the remaining tickets two hours before the event at a steep discount, because any amount of money you get for those tickets is better than getting no money and having empty seat.
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