Why are ticket prices constantly changing? Blame it on revenue management

You have searched for a flight online last week and you saw it 89 euros. Unfortunately, you waited a day to think about it and the price had become 134. You waited some more, hoping for a drop, and it came to 210. At that point you booked it convinced you had missed the chance, and two days later, going through the site again out of curiosity, the price had dropped to 76 euros. If that happened to you, it wasn't bad luck. It is the revenue management, and it works exactly like this.

What is revenue management

Revenue management is the Discipline that deals with selling the right place, to the right passenger, at the right price, at the right time. Born in the 1980s when American Airlines was the first airline to develop an automated fare management system, it is now a central function in every carrier in the world, from low-cost carriers to large intercontinental carriers.

The underlying logic is simple: an airplane has A fixed number of places and a fixed departure date. Past that date, unsold places are worth zero. You can't stock them, you can't sell them the next day. An airline revenue manager says this with an effective metaphor: the seat is like an apple from the greengrocer, if you don't sell it before it rots, you've lost it forever. The goal is therefore maximize revenue on each flight, do not fill it at any price or empty it with excessively high fees.

Tariff containers

Each flight does not have a single price: it has dozens of different prices, organized into what are called in the jargon "tariff classes" or "make bucket." It's not about the cabin classes you see on the plane (economy, business, first), but about virtual categories within each booth, identified by a letter of the alphabet.

In economy class you might find classes Y, B, M, K, Q, to give examples. Y is typically the highest and most flexible fare, refundable and changeable without penalty. Moving down to Q you get the cheapest fares, with more restrictions: no refund, no change of date, no baggage included. Same cabin, same physical seat, very different price and conditions.

When a flight's sales open, which is usually 11 or 12 months in advance, the company does not put all the available places simultaneously. It opens a number of them in the cheapest classes, and as these fill up, it moves on to the next classes with higher fares. The mechanism is designed to reward early bookers with low prices and capture those who have no alternative by paying more.

Why prices rise and fall unpredictably

The complication comes when modern revenue management systems stop following linear logic. The algorithms They analyze dozens of variables in real time: how many seats have been sold so far, at what pace booking is progressing compared to previous weeks on the same flight, what competitors are doing on the same route, what events are at the destination, whether holidays are approaching, the historical seasonality of that route.

If the system detects that reservations are going faster Than normal, raise the price. If bookings slow down, it may lower it. This explains why you can find a lower price three weeks before departure than three months before: the airline has sold less than expected and decides to lower the fare to fill the remaining seats. As confirmed by several revenue managers with experience in the airline industry, Booking well in advance does not necessarily mean pay less, because forecasting systems can determine when the highest demand will occur and calibrate prices accordingly.

Business traffic and the last minute effect

There is an underlying segmentation that airlines are familiar with: business travelers book late, often a few days before of the departure, and doesn't have much flexibility on the date. Leisure travelers book earlier and may move up a few days. Revenue management systems take this into account. On flights where business demand is high, the last fare classes stay open at high prices until the last moment. On a Tourist route with few business passengers, an almost empty flight with five days to go could instead drop in price dramatically.

This is the reason why the romantic idea of affordable last minute ticket works sometimes and fails miserably others. It depends on the type of flight, the route, the period, and how many competitors operate on the same route.

What changes with low-cost

Le low cost airlines such as Ryanair and easyJet have a slightly different approach but based on the same principle. Prices start very low in the early stages of sales, often as much as 12 months in advance, to generate interest and fill the plane as soon as possible. Then they gradually increase as seats fill up. A study by researchers at the University of Pavia and Keele University found that per the low-cost flights the lowest price point is found on average around 10 days before of departure, when the company tries to sell the last remaining seats before they are completely lost.

Myths to dispel

Cookies do not influence prices. The survey by theCompetition and Market Authority published in late 2024 found that the vast majority of companies do not practice customer profiling based on device or browsing history. Navigating incognito makes no difference.

Book on Tuesday is not a certainty: some studies find statistical correlations between day of the week and average prices, but these are aggregate trends, not rules that apply to each individual flight. Tuesdays and Wednesdays tend to have slightly lower prices in certain markets because demand from travelers is lower, but the algorithm reads each flight individually.

The ideal advance is not fixed. In fact, for European medium-haul flights, the optimal window is often between 6 and 10 weeks before departure, for the long range between 3 and 6 months. But in peak season, on high demand flights, waiting means paying more anyway.

How to use this information on revenue management

Know how the system works Does not eliminate unpredictability, but it helps to make more informed choices. Setting price alerts on a effective comparator like Skyscanner alerts you when the price of a flight drops, without having to manually check every day. On competitive routes with many operators, the flexibility of a few days can be worth a lot. On routes dominated by one carrier with high demand, waiting rarely pays off.

The next time the price changes while you're looking for a flight, it's not a hallucination and it's not a punishment for overthinking it. It is simply an algorithm updating its best estimate of how much you are willing to pay in real time.