How many other airlines are flying the same route? Travel on a route that only has one or two airlines to choose from will have less competition than a route with 10 airlines. When another airline offers a fare sale or changes the price on a route, planners need to decide how much this will affect sales and change prices accordingly. On some commuter routes, there is competition from Amtrak train service and other sources.
The number of possible passengers on the route compared to how many seats are available on the route affects what travelers are willing to pay. If there are many possible passengers and seat availability is low, planners can charge higher prices. Airlines could add additional flights to the route if demand is so high as to make additional flights worthwhile. This could lead to reduced demand pressures on ticket prices. If demand seems lower than expected, planners can lower the fare as the flight date nears. If demand is higher, the fare can be raised.
A flight that primarily fills up with business travelers will have less price pressure than one that fills with tourists, or leisure travelers. Tourists tend to be more price sensitive and more willing to fly a different airline, at an undesirable time or take a longer route to save money. Business travelers tend to be more airline loyal and have a less-flexible travel schedule. Business travelers also tend to buy tickets closer to the flight date compared to leisure travelers.
Last-minute travelers are usually more willing to pay a higher fare because their need is greater. Planners need to determine how many of these last-minute seats are needed to be held as well as how much someone paying for the tickets a month before a flight is willing to pay compared to how much someone is willing to pay seven days before the flight. The closer it gets to the flight, the more people are generally willing to pay.
What does it cost to operate the flight? Fuel, manpower, gate fees and airplane purchase and maintenance are among the costs associated with the flight. Planners must determine the demand for the flight and put the right aircraft on the route that meets the demand. Once the airplane is determined, the airplane costs and all the other costs are added. Planners need to make sure that the fares and expected number of passengers create enough revenue to make the flight profitable. This is compounded by passengers that need to fly on two or more flights to get to their destinations. All flight costs need to be factored in the fare decision.
