OXFORD, Miss. – The holiday season is a time for getting together to celebrate; but if that get-together involves traveling by air, ticket prices may become a major barrier for holiday cheer.
November through early January is a peak travel season in the U.S. That means airlines can charge significantly more for tickets than during other times of the year, said Garrett Scottassistant professor of economics at the University of Mississippi.
“You can track the average price of tickets over time, and you will see that they peak in November and December,” he said. “From the airline’s perspective, the ticket is priced well for the demand that exists.
“Of course, we don’t like that but blame the people who are willing to pay that price.”
Scott recently published “Uncertainty in Dynamic Pricing Environments” in the Southern Economic Journal. In the paper, Scott and his co-author Richmond Woblesseh explore a pricing model of consumer choice concerning airline tickets.
While ticket prices peak during the holiday season, smart travelers can find bargains, even among the highest prices. Scott offers a few basic tips:
- Book early, as soon as you are confident of your travel dates
- Be flexible on how long you plan to stay at your destination
- Explore different arrival and departure times, including less popular options
- Shop for tickets online outside regular business hours
- Check out prices for basic economy seating.
The first, and most important, checkpoint is to book as early as possible. Scott recommends booking most flights two or three months in advance.
“That is the time when the ticket is priced accurately for what the demand is,” he said. “But it is usually the case that if you buy a ticket further in advance of that two- to three-month window, you can get a better price.”
Scott recently flew from Memphis to North Carolina, and he bought his ticket eight months in advance, which turned out to the best price available.
While in some cases, prices can drop close to the departure date if demand does not meet the airline’s expectations, Scott said he would not count on that. More often, prices rise close to the flight time as seats fill up.
“There is some truth to the price dropping at the deadline, due to unsold capacity,” he said. “The issue there is if the flight is full, you are not going to get the ticket, so I would not bank on that one.”
Booking flights for so-called “irregular days” can yield some savings, Scott said.
“Think about giving up some time on either side,” he said. “Avoid the Wednesday or Tuesday before Thanksgiving, as getting there on Monday may be better, pricewise.
“Definitely don’t fly on Dec. 24. And consider staying a few days longer.”
Flight times can significantly affect ticket prices. For instance, a 6 a.m. flight will likely be cheaper than one that allows travelers to wake at a more “reasonable” hour to get to the airport.
“Don’t buy the ticket during business hours, as that is when business users shop,” he said. “Try to buy the ticket later in the evening or early in the morning.
“You and I are using our own money for the trip, while a business traveler will be using business or university funds. They also have to make the trip, whereas for us it might be a choice. So, they are not as price sensitive.”
Another anecdotal tip is that parents might consider having their children who are students do the booking.
“I have heard that sometimes airlines will track IP addresses,” he said. “So, if you are on campus Wi-Fi, there is the belief that you are more likely to be a student than an adult with a salary, so they can sometimes source cheaper tickets.”
Although economy seating generally is not as comfortable, it is always the best deal because airlines offer these seats close to their average cost. Where airlines profit is on first-class seats.
“First class is, like, close to 10% of the seats on the plane, and that accounts for more than 50% of the profit,” he said.
In some cases, they might even lose money, and that can create a better experience for the traveler.
“I’ve definitely flown on flights that are only at 30% capacity because it was a weird time, and the ticket was super cheap,” Garrett said. “And I preferred the experience to a packed flight.”
Top: Getting the best price for a flight home for the holidays requires flexibility, persistence and patience. Ole Miss economics professor Garrett Scott shares some best practices for booking that can dramatically raise your odds of getting a great fare. Graphic by Sarah Tewolde/University Marketing and Communications
Source: olemiss.edu
