Sunday, May 20, 2007

In the air (part 2 of 2): Forecasting flight fees? Cool facts and current problems

farecast.com is new. The idea: by understanding the pricing formula airlines use (you may of heard of 'yield management techniques'), farecast.com can tell you if fares will fall, rise, or not change, in price. And, accordingly to reports, they are really good at it! A 75% success rate is something to be proud of.

How does it work? Airlines' change prices based on how fast the flight is filling-up. For example, if the flight is only 50% full a week before departure, one can expect the price to fall because airlines' will try to persuade travelers to fly with them with lower fees. On the other hand, if a flight is 50% full a month before departure, the price might rise because there is strong demand to travel on that day.

An Example - Toronto to New York (JFK Airport)
Just say that that want to go to NY this summer, and you are flexible with departure times and the duration of the trip. Can farecast help us? Let's see. Once you arrive at the farecast website, scroll down to the part that says "Flexible Travel Graph Search: See low airline tickets over the next 30 days". Select your departure city - ok, well it says "Ontario, CA" which means Toronto in farecast talk - and your U.S. destination.

COOL FEATURE 1: The first screen shows the price of a flight over the next thirty days between TO and NY: it shows the lowest fare on each day; they depart at all different times and for different durations. The lowest price over the next 30 days: 9 June, returning 12 June. When I select that flight, it tells you the airline (US Airlines in this case) and the departure dates.

COOL FEATURE 2: For the above-mentioned flight, facecast.com tells me to wait: the price is expected to drop by $31 in the next 7 days, and with a confidence level of 58%.

COOl FEATURE 3: If you want to go to NY in June, and you are willing to wait for a cheaper price, you may consider taking the "Fare Gard" - for $9.95 they will guarantee a price for 7 days.

PROBLEMS: (i) Most importantly, I was unable to find the prices cited farecast.com on the airlines website. (ii) Because farecast.com only gives you the lowest price for one flight at a time, and not the combined departure and return fare, it is not a perfect system - you still need to do a lot of searching. In fact, expedia.ca does a better job at pricing the return trip between TO and NY for the same dates (June 9-12, $460).

Suggestion:
Use both expedia and farecast! Both offer useful services: farecast for the trend in prices and expedia for the total trip pricing. If I was the CEO of expedia.com, I would get the forecasting technology used by facecast.com to enhance my services.

Special Note: For some reason Zoom Airline flights do not appear on either expedia.com or farecast.com.

4 comments:

MadJenny said...

I love that site! I played a little, and I found that you could fly return trip to London for just over $400 in september. Amazing.

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