Yesterday, our pallid flesh dripping off our bones, melted from the burn we had received at the hands of Upgrade Travel when they expertly flamed our Buy Flight Tickets at Midnight post, we petulantly retorted: “Okay, smart guy, when is the best time to buy a ticket?”
We were actually calling out the Upgrade Travel punks, but Rick Seaney of FareCompare.com took it as a personal challenge and fired us back a retort in the comments section.
But it’s too good and informative to allow to languish there. It really deserves its own post. Rick’s exhaustive and extremely informative guide to getting the cheapest tickets after the jump.
When is the Best Time to Buy?
I am not sure how “clairvoyant” I am but I will provide some facts that might shed some light on “When is the best time to buy?”
I wish I could wave a magic wand and say there is an exact time which is perfect to buy. In reality the best time to buy is city pair specific and depends on your tolerance for risk.
That’s right!! Purchasing travel is very similar to the stock market where there are normally only a few perfect times a year to purchase. Most people I speak to have more than a slight pang of anxiety just before hitting that button that dings their credit card because they know that the person on the plane next to them — just might just be paying less.
That said there are many tips and tricks to making the perfect purchase and for those who wish to get into the details then read on — or skip to the end for the juicy stuff
The purchase of air travel consists of 3 major components (1) fares, (2) flight schedules and (3) inventory. ALL three things must be in alignment to get the very best deal. For this particular discussion I will limit my comments to U.S. and Canadian travel (International travel has a completely different set of issues). Let’s start with a brief background of these 3 components.
90+ percent of all purchased fares in the U.S and Canada are “filed” by the airlines continuously each day to a clearing house in Washington DC called ATPCO (Airline Tariff Publishing Company). ATPCO was originally a government agency until deregulation in the late 1970′s. It is now owned by several dozen airlines and acts as the distribution hub for over 60 million fares filed world wide.
Each airline files their fares continuously during the day to ATPCO where they are aggregated and distributed to all “subscribers” (airlines themselves and global distribution systems which power the online agencies e.g. Expedia, Travelocity and Orbitz) at specific times. For U.S/Canadian fares distribution occurs on weekdays at 10:00am, 12:30pm and 8:00pm and on weekends at 5:00pm EST.
The airlines and online agencies then load these fares on to their quoting/booking systems 2-6 hours later. The evening feeds are loaded between 12:00am and 1:30am the next day.
Fares are filed in a price ladder (low to high) that allows the airlines to control which price they allow a particular seat to be sold, sometimes called inventory buckets. Inventory buckets are based on several variables including passenger type, day/time, seasons, flight restrictions, advance purchase, minimum stay, maximum stay, fare combinations, surcharges, travel periods and sales restrictions. This means a particular seat can be sold at dozens of different prices based on a fare and its rules.
At FareCompare.com we are a “subscriber” to this raw fare/rule information and our technology processes this information very quickly (less than 20 minutes) and is available on our site and sent out in alerts hours before it is loaded on the quoting/booking sites.
(2) Flight Schedules
An airline flight schedule is the complete set of all flights and times that they operate or share with another airline.
The bulk of all flight schedules are filed by the airlines with OAG (Official Airline Guide) and Innovata .They act as the distribution hub to quoting/booking sites for flight information which they send out a couple of times a week.
Additionally the quoting/booking sites get instant flight update notifications from the airlines each day so that last minute issues (cancellation, mechanical failures, etc) can be posted immediately.
A particular flight information record includes the maximum seat count and cabin information as well as defining which inventory buckets can be sold for seats on the plane.
Inventory is the key variable in the quest for the best price and is ultimately controlled by the airline. The airline has sophisticated systems that use historical models and current real-time sales information to decide how many seats they want to sell at a particular price point on a particular flight at a particular point in time. This is called yield management and it is a very powerful tool the airlines use to maximize profit.
The question quoting/booking sites ask the airline is very simple – “Will you sell me this seat at this price (bucket), if not, at what price bucket will you sell it to me?”
The answer to this question in theory can be different every time you ask it. That’s right every time you ask it!!! Each agency shopping site in theory could get a different answer; this is because one of the variables that yield systems use to make a decision is “who is requesting?”
Now you know why consumers get so frustrated when shopping for air travel and why you try 3-5 different sites before making a decision.
If it costs an airline 13 cents per mile to run their aircraft, they have to figure out how many seats at certain price points must be sold to make a profit. The will sell some seats at 5 cents a mile and others at 60 cents a mile or more. Obviously to get the best price it is better to be at the bottom of that scale.
Airlines actively manage their domestic revenue in 4-5 month cycles so if you are purchasing travel 5 months in advance, know that the airlines have normally only released mid price inventory and are happy to sell you seats at 20-30 cents per mile, which is definitely not the best price.
Ok, so you either put up with the technical side of the story, or you cheated and skipped to here :-); now let me boil down all this mumbo jumbo into a set of tips related to the original question “When is the best time to buy?”
Know what a good price is. FareCompare.com keeps over 2 years of historical fare information that allows you to quickly see where the current market prices fall. If they are at or near an all time low then this is the perfect time to buy.
Check the price volatility of your city pair. If the prices are bouncing around by $100 or more a few times a month or more, make sure you buy on a down swing. FareComapre.com shows a 30 day history bar chart so you can quickly check volatility.
Know when the best time to buy was LAST year. FareComare.com shows a 1 year history graph where you can easily see what happened historically. That doesn’t mean it will happen this year but it is part of a “savvy” air travel shoppers arsenal.
Know the price trend for your city pair. If the prices are trending up because of airline increases related to fuel or heavy demand and there is short supply it still may be a good time to buy even if the price is not near an all time low.
Sign up for an email early alert system like ours at FareCompare.com that tells you exactly when prices have significantly changed. When seats are limited the people that are first to know have first crack.
Last minute is useful for those with flexibility and daring. There are occasions in certain city pairs where a last minute purchase can be a super deal. These are great for those with ultimate flexibility and who can pick up and go at a moments notice. These are daring for those that are planning to attend a family reunion
The business and leisure price break point is normally 14 days advance purchase (sometimes 21). As all business travelers know you are not likely to get a good price inside of 14 days.
Most people stumble upon a good deal. The volume of air travel shopping queries each minute is staggering and some of those queries hit the jackpot. You don’t have to happen upon a good deal.
“WHEN IS THE BEST TIME TO BUY?”
When you have quickly and easily researched all aspects of your purchase and click the “do it” button with the confidence that you are making the most informed decision.