Tips to getting the best bang for your airfares buck

LEG ROOM: Supply and demand is the biggest factor in how airline tickets are priced.
LEG ROOM: Supply and demand is the biggest factor in how airline tickets are priced.

There are a number of common misconceptions when it comes to securing the best price on airfares.

Many travellers have experienced the situation where they've found a good deal on a ticket, but don't want to commit to buying it right then and there.

Three days later when they finally make up their mind and whip out their card to book their flight - they find the price has gone up significantly. But why does this happen?

Travel search site Skyscanner has lifted the veil and provided a peek behind the curtain into the world of flight pricing, which has seen significant change in the last decade as more automation and less human interference has revolutionised the programs and algorithms behind the scenes.

Skyscanner travel industry expert Alex Astafiev said there were a few key principles people should be aware of and a handful of misconceptions that commonly persist.

"Flight pricing essentially comes down to a process known as 'yield management',"Mr Astafiev said. "While it sounds complicated, it is simply a strategy based on understanding and anticipating consumer demand.

"To put simply, airlines allocate different 'buckets' or price levels on every flight ticket.

"For example, a $500 flight to Bali offered by an airline will exist, but there are probably only a few seats on a flight available for that price. Once seats at that price level sell out, tickets will be moved to the next pricing level.

"Knowing how to navigate and predict an airline's typical 'buckets' will likely help you secure better airfare deals in the long run."

The top five principles and misconceptions behind flight pricing algorithms and how to beat them:

Good ol' supply and demand

The first misconception is that hitting refresh on a particular flight route will drive the price up. This is actually incorrect, as flight prices are affected by sales numbers not search numbers.

This is why travelling in off-peak times is the best way to travel on a budget. Airlines know which seats sell best at particular times of year (eg. school holidays) and they are fully aware of the more challenging periods to sell tickets (eg. rainy season in Phuket) and they adjust their buckets, or price levels, accordingly.

You may recall seeing fewer bargains during popular flying periods and more bargains during quiet travel periods. This is good ol' supply and demand at work.

Consider how airlines control ticket prices

The above concept works in the traveller's favour too. Airlines can't fly smaller planes if only half their tickets are booked, so they need to make sure they're able to fill it. Pricing allocations can change depending on whether tickets are sold at the level the airline initially predicted.

Therefore, if an airline thought a flight to Japan in March would sell well, but is actually selling poorly, the airline may increase the allocation of tickets in a lower priced bucket, meaning great value tickets for travellers.

Knowing is half the battle, but there are hacks to help

The only way to know if it's a good deal is by actually finding out what the average price for that particular route is, and for that particular season. But knowing is half the battle...

Travellers should get familiar with the usual prices before they commit, and when they see a price that seems much lower than usual, be armed and ready to snap the ticket up.

Skyscanner has made this task easier through its Price Alerts feature, an alerts set up system where Skyscanner will keep an eye on prices for them.

Later is not always better

Airlines' pricing strategies will protect some seats for 'late availability' bookings. This is to cater to last-minute business travellers who need to be at a certain place at a certain time and will pay a premium to do so.

So, this means the closer to a departure date, the more likely it is that ticket prices will increase. This might not always be the case, but buying early may help you save.

Online travel agents versus airlines

Travellers often think booking directly with airline cuts out the middleman and secures a better deal, but that's not necessarily the case. Online travel agents (OTAs) often negotiate private fares with airlines and have agreements in place to secure competitive prices, by essentially committing to bring certain volumes of sales.

In some cases, OTAs may even undercut the airline price by a certain amount, sometimes as little as $1, in order to attract a booking and have a chance to offer them their choice of hotels, car hire and the like.

OTAs may commit to a price they've shown even if the actual price has changed in the background, even while others have already displayed an updated price.

This story Tips to getting the best bang for your airfares buck first appeared on Local News.