Two passengers in the same row can pay wildly different prices for the same flight. Here’s how airlines decide what a seat costs, and why the price keeps moving.
The price of a plane ticket isn’t fixed. It is set by a system airlines call revenue management, which aims to earn as much as possible from every flight.
Each flight’s seats are divided into many fare levels, sometimes called fare buckets or fare classes. Even in economy, the same seat can be sold at a dozen or more different prices. Airlines usually make a limited number of the cheapest fares available first. Once those are sold, the next price level opens, and so on.
Behind the scenes, forecasting software estimates how many people are likely to want each flight and how much they will pay. If a flight is selling faster than expected, the system closes the cheaper levels sooner. If it is selling slowly, more cheap seats may be released, or the flight may go on sale.
That’s why prices often rise sharply in the final weeks before departure, when business travellers and people with urgent plans are booking and are less sensitive to price.
What pushes fares up and down
Demand is the biggest factor. School holidays, long weekends, major events and peak business times all lift prices. Early morning and late evening flights, and midweek travel, are often cheaper.
Costs matter too. Fuel is one of an airline’s biggest expenses, so a rise in oil prices or a fall in the Australian dollar can feed through to fares. Taxes and airport charges, which can make up a meaningful part of a domestic fare, are also built into the price.
Competition plays a major role. Routes with several airlines tend to have more cheap seats. Australia’s domestic market is dominated by the Qantas group and Virgin Australia, and the collapse of Bonza and Rex’s entry into administration in 2024 reduced competition on some routes. The ACCC monitors domestic airline competition and prices.
There’s no reliable trick to always getting the lowest price. Clearing browser cookies hasn’t been shown to make a meaningful difference, and there’s no single best day of the week to book. Booking well ahead for peak periods, being flexible with dates and times, comparing airlines, and setting fare alerts are the most dependable ways to save.
The cheapest fares also come with conditions. They may not include checked baggage or seat selection, and changes or cancellations can be costly, so it’s worth checking what’s included before comparing prices.
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