Sunday, January 24, 2010

When to Buy Airline Tickets

This weekend I’ve been mulling over how annoying it was that there isn’t really freely available data on prices for airline tickets. Farecast, the one site that I was aware of that did something like this, was purchased by Microsoft and is now a part of Bing Travel.

So what separates the market for airline tickets and others is that ticket prices are extremely sporadic from day-to-day and even by the hour. This makes getting a really good deal on airline tickets very difficult for the average consumer. There’s only one participant in the transaction that gets a good deal, and that is the airline. Their pricing schemes are actually quite ingenious when you begin to think about it.

Typically, an airline will have multiple pricing ranges for seats on the same flights. That is, 10% of seats will be $50-100, 40% will be $100-$150, and 50% will be >$150.

The gist of price discrimination is that there are usually people who are willing to pay than you are for the same product or service. Instead of charging everyone a flat rate, a company will vary the price based on the customer. Simply put, movie theaters don’t have senior and student discounts because they’re particularly nice, they do it because they make more money this way =). See Wikipedia for more information.

Alright, back to the meat and potatoes.

After some thought, I decided Mechanical Turk would be the best way to gather this info. So I got down and wrote a Python script that randomly generated 500 origin cities, destination cities, and dates within the next 329 days (it seems most airlines don’t give price information past this amount of time). The cities were only the ones I was interesting in (Miami, LA, NYC, and San Francisco).

I set up the job, uploaded the batch of data, and salivated throughout the night. When I woke up today, I got down to analyzing the data.

Some interesting patterns emerged.

First of all, Wednesday is (on average), the most expensive day to travel, unless you’re flying from LA, where a Thursday ticket will cost you on average $500 to Miami, NYC, or SF. Miami was the worst city to fly from, with the most expensive day costing a traveler about 564 buckeroos.

Here are average weekly ticket prices between the four cities over this year.

Prices appear to be highest for the next week, then hit a yearly low in late February, when the average ticket price hits $109.13. Cheap. Prices are a little unpredictable over the summer, hit highs in early July and late September, and plateau over the holiday season. We’ll see how much of this is due to the day that this data was gathered.

How about cheapest airlines? Well, you may be surprised about this as well.

Airline Number of tickets
Delta Air Lines 100
United Airlines 62
AirTran Airways 54
US Airways 36
Alaska Airlines 27
Virgin America 20
Continental Airlines 10
Frontier Airlines 7
JetBlue Airways 7
Spirit Airlines 3
Midwest Airlines 1
Other 1

Southwest didn’t make it once! Now that was a surprise.

This is only the tip of the iceberg. Over the next week, I’ll keep listing HITs on Mechanical Turk, and should have some more robust data on when the best times to buy tickets are. Stay tuned…




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