I’ve written about this topic before, but after getting tons of emails today from friends asking about the topic, I decided it was worth a refresh. Various news articles, all based on the same study, have an update to the conventional “wisdom” (which is actually false) that you should always buy plane tickets on Tuesdays for the best prices. According to a new study, you’re now supposed to buy your tickets on Sundays for the biggest discount. However, before you start following that update blindly, keep reading to find out why the study is fundamentally flawed.
So here’s how the study worked: researchers at Airlines Reporting Corp tallied up ticket sales for the past 19 months (sounds like a big sample size, right?) and then performed some simple analysis. When you add up all the tickets sold on Mondays, all the tickets sold on Tuesdays, etc, which day of the week had the lowest average price? Answer: Sundays, whose $432 average was $65 lower than Tuesdays’ $497 average. However, in a gap of logic that no news outlet that I’ve seen has addressed, the researchers have taken that to mean that ticket prices are lower on Sundays than on other days of the week. Ergo: save money! Book on Sundays! Unfortunately, what this study completely misses is that people aren’t necessarily booking the same tickets on Sundays that they are on Tuesdays.
For example, what days do you think the average business traveler books their ticket? Oh, sure, there are always those last minute trips that you have to book on Sunday in order to fly out Monday morning for a critical meeting… but for the most part, business travelers are booking their (expensive) business trips during normal business days: Monday through Friday. In fact, a lot of business travel agencies even have a policy of not ticketing international flights until normal business hours… so if you are booking a business ticket on a Saturday via the normal channels, it won’t be processed until Monday morning unless you go through different channels to expedite the ticket processing.
In general, leisure travelers are more price sensitive than business travelers. They have more flexibility in carriers, dates, times, and sometimes even place (“should we go on vacation to Orlando or Miami? Looks like Miami is significantly cheaper!”). Airlines go way out of their way to try to segment these different customer profiles and use that segmentation to price their tickets differently; it’s why tickets often have fare rules like advanced purchase requirements or Saturday night stay requirements. (Hint: most business travelers don’t want to stay on Saturday nights, and business travelers are more likely than leisure travelers to book their flights with less than seven days notice.) To learn more about fare rules, check out my post on how to use ITA Matrix, which is the gold standard best tool for flight searches.
So if you are looking at days that have more leisure travelers than business travelers booking, what type of fares do you think they’ll be buying? That’s right – the cheaper, leisure travel tickets. This study didn’t look at “what price is the same flight if you book it on a Tuesday vs on a Sunday”; it only examined “what’s the average price of the tickets being sold on Sundays vs Tuesdays”. Without reviewing any data, I could have told you that average fares sold on Saturdays and Sundays were generally lower than those sold during the week.
Another logical fallacy: in the Wall Street Journal’s coverage of this study, they say:
One factor behind the change: Airline executives come into work Monday looking to raise fares, not discount them with sales to fill seats. Just this week airlines put through a $2 each-way across-the-board fare hike, even though prices for oil—the largest expense for airlines—have been plunging. Prices are still going up due to increasing demand for the limited number of available seats.
Those greedy airlines, raising prices even though their cost to fly is decreasing! (Never mind that airlines are generally extremely unprofitable businesses, teetering on the brink of bankruptcy, and that a few highly profitable flights are generally subsidizing the many flights that lose money.) But the very first thing you learn as a revenue management analyst is that your goal is to maximize total revenue. Not to gouge customers and make them sell their firstborn to pay for tickets. Not to fill every seat and laugh as customers are squished together into increasing narrow seats. But to maximize revenue.
If I have a 100 seat plane going transcon from NYC to San Fran, I could probably refuse to charge less than $1000 a ticket and sell 10 business class seats (total revenue = $10,000). I could probably also sell out the plane well in advance by charging just $100 for every seat on it (total revenue still = $10,000). But if I sold the first 30 seats at $150, the next 30 seats at $200, the next 10 seats at $300, and then maybe just 10 last-minute seats at $500, I’ve hit a total revenue of $20,000 – even though I didn’t charge the most expensive price possible or sell out the plane. In fact, that load factor of 85% full is pretty typical. Airline executives would love to raise fares, don’t get me wrong, but their primary goal is maximizing revenue – and that isn’t always done with a fare increase.
As far as Tuesdays being the most popular day to launch a fare sale? Sure, I’ll give you that pricing analysts often come in on Mondays and decide to launch a sale on Tuesday morning in order to help fill flights that have very few seats sold. But inventory analysts also frequently come in Mondays and go “oh, wow, a ton of seats sold over the weekend. I know we have that sale launching tomorrow, but I’m going to restrict the available inventory for it so that we’re still within legal guidelines but so that I’m not giving away seats on flights that are performing well.” And here’s a hint: that Sunday night flight home from Thanksgiving weekend is performing well, and you’re not going to find that (or other similarly desirable flights) on sale. If you want to find a sale fare ticket home for Thanksgiving, I hope you don’t mind flying out on Thanksgiving Day at 2pm, arriving when everyone is already passed out in a tryptophan-induced turkey coma, and then returning the following Wednesday, having missed three days of work. But hey, you saved $50!
What about how far out to book? Book early, but not too early. (I explain this in my 2009 post here, which is still relevant.) The ARC study noted that the average number of days out (NDO) for the cheapest flights was 57 days for domestic and between 10 months and 3 months out for international flights. However, please note that booking curves for different routes can vary dramatically, and are impacted by so many different factors that they’re basically impossible for a layperson to predict. (Hint: while I’m not all that familiar with the market, I’m betting that prices on flights from the US to Nigeria are not exactly the same as they were this time last year.) If you are really hell-bent on identifying the cheapest time to book, you would need to study that individual market and its price fluctuations to get a sense of what’s a good deal vs what is par for the course. But if you’re looking for that magical holiday period I referenced earlier, remember that prices for those flights tend only to stay the same or go up, not to go down… and the best time to book was probably months ago.
In summary, the best way to “get a deal” on airfare is to book whatever day you want, but go places no one wants to go, when no one wants to go there. Want a good deal to Europe? See you in windy, gray March. Seeking a Caribbean vacation? I’d recommend hurricane season. And for just about any destination, I hear that the Tuesday night redeye is quite convenient. Happy travels!