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?
In: 5
Price discrimination. https://en.wikipedia.org/wiki/Price_discrimination
The value of a ticket is different to every person, so the airlines want each person to pay as close to their maximum value as possible.
A business traveller has to go no matter what, usually on short notice and they aren’t personally paying for the ticket, so they don’t really care what it costs.
A holiday traveller is planning a long way out, and is very price sensitive.
So prices start low to get the holiday travellers. This gets enough passenger to ensure the flight will go. As the plane fills up, each seat gets more expensive, because each remaining seat is more valuable.
A few weeks before the flight, most expensive to get the business travellers and anybody who “needs” to be there.
A few days before the flight, drop the price to get anybody into the seat. An empty seat is losing money, better to get some money for the seat than none.
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