This time, I’d like to talk about my recent experience in booking international air fares, or my exposure to how price discrimination affects the price of airline tickets.
Two weeks ago, I booked a round trip international air ticket through a travel agent, and I got the chance to see how price discrimination works in the airline industry (thanks for the agent to show me how he operates).
Usually when we search a round trip air ticket online, the system will only generate some possible combos of departure and return tickets, such as “Canada-Italy, departure time***, return time ***, price (pre-tax) $950, Air Canada”. However, in the system used by an agent, the same research will lead to a much more detailed results. A great feature will be the breaking down of a round-trip ticket into two one-way ticket belong to different classes. An example would be:
Flight: Canada => China (May 15th) -Departure Class A: $900, Class B: $1250, Class C: $1550, Class D:$ 1750, Class F : $2050 … Class L: 3150, Class M:$3400… Class S: $4500
Flight: China => Canada (Sep. 3rd) – Return Class A: $900, Class B: $1250, Class C: $1550, Class D:$ 1750, Class F : $2050 … Class L: 3150, Class M:$3400… Class S: $4500
So the agent will pick up a combo of “departure” and “return” ticket according to the needs of a customer. They will first turn to the cheapest class- Class A, but if no class A ticket is available, they will then go for B, C, D… The final round trip price will be the average price of “departure” and “return” tickets. Say if your “departure” ticket is in Class A and your return ticket is in Class C, then your pre-tax fare price would be (900+1550)/2=$1225.
If someone need a ticket immediately ( say, he/she books a ticket today for the flight on tomorrow), chances are tickets belong to cheap classes are already sold out, so the only
choice may be Class S ticket with incredibly high price of $4500 (actually some of my friends have experienced this unfortunate situation). This explains why people who books their tickets earlier pay a cheaper price.
So next time when you plan to travel somewhere, make sure having your air fare booked in advance!