Why do prices vary so much for the same flight?

Last updated 13:07 12/08/2014

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On a recent trip to Canada, Gina Kano couldn't help thinking that she probably paid more for her ticket than other passengers on the plane.

"And there is no way to know why," the marketing executive from Los Angeles said. "Is it just luck? When there is no logical reason, it's very annoying."

A new study has confirmed what Kano and many airline travellers have long suspected: On any given flight, passengers can pay twice as much as others in the same cabin section, and even as much as eight times more.

The study, based on millions of airfares analysed by the travel-planning site Hopper.com, looked a several US domestic flights taken in early May, including a United Airlines flight from Los Angeles International Airport to Las Vegas. On that flight, one-way fares ranged from less than US$200 to more than US$1600 for coach seats.

The study also found that some airlines have a greater mix of prices than others. To gauge the disparity, Hopper calculated the percentage of fares that varied from the base fare on that flight.

Fares varied the least on Spirit Airlines (5 per cent) and Virgin America (15 per cent), while larger carriers such as United Airlines had 18 per cent variability, according to the study.

The prices seem to vary less on flights to popular holiday destinations, such as Hawaii, because leisure travellers are more sensitive to price and are quick to cancel a trip if airfares are too high, said Patrick Surry, Hopper's chief data scientist.

Meanwhile, flights to popular business destinations such as Washington, DC, or Chicago have greater price variability because business travellers must make those trips regardless of price, he said.

But Surry said further studies are needed to determine why prices vary so much between flights and airlines.

"This is something we'll be digging into in more detail," he said.

- Los Angeles Times

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