Why do travelers pay different amounts on the same airline flight?
Airlines use a very complex method of segmenting their available inventory into “fare classes” in order to achieve the necessary revenue to pay the operating costs of the flight and earn a profit. When seats (inventory) are made available it is known (from historical performance) that a certain number of seats in each fare class (economy, business, first class, etc…) will be sold in advance on a given flight on a particular date and time. As the supply of seats is sold during the weeks before the departure date, airlines adjust prices on the remaining inventory with the expectation that as supply grows smaller, customers will be willing to pay a higher price to travel. Even an economy class ticket purchased hours before the flight can be quite expensive, however; some airlines (low fare carriers such as Southwest and jetBlue) have now “capped” their fares so that the most expensive fare never exceeds a fixed amount.
