Ever wondered how airlines price tickets? I’m sure you have if you’ve ever spent time online looking for low fares as prices seem to change daily, hourly or even by the minute with no rhyme or reason. In the above five-minute video, CNBC does a good job explaining the dynamic pricing strategy employed the major airlines, referred to as airline revenue management (ARM). The video shows that if you’re flying on a popular business route like London-to-Hong Kong, then you want to buy your tickets well in advance. But if you’re flying on a leisure route like London-to-Bali, then you want to keep pricing out your fare until you get something low (that’s why I use fare alerts, as I explain in this post on finding cheap airfares). For more tips and insight, check out the video.

How airlines price tickets

 

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