How to save money on airfare

Everyday it seems like there’s another article about how to get the cheapest airfare. After decades of buying plane tickets I don’t believe there’s any magic bullet.

Yield management

Here’s a basic explanation of how most airlines sell their seats. Each airline practices yield management. Their goal is to maximize the total revenue collected for each departing flight. They want every plane to take off full and with every passenger paying the highest possible fare that the market will bear. Most airlines release seats 331 days in advance. During that time the seat price will change many times. A certain number of seats are allocated at different price levels. As seats sell at the lowest prices the next group of seats costs more.

There are some travelers, mostly business travelers and rich people, who don’t care what price they pay. So airlines want to sell them the most tickets. However there are also travelers who do care about price and may not buy a ticket to a particular destination if it’s too expensive. These customers buy most of the tickets. So it’s a constant process for the airlines to change seat prices to maximize their revenue.

Work, planning and research

There is a way to get close to the lowest airfare possible. It involves a lot of work, planning and research. Are you groaning? If your travel MO is to decide on June 30 that you want to go to Hawaii in July good luck! I guarantee you that you will overpay unless you get lucky and hit a sale. So please don’t bother reading any further and feel good knowing that the person sitting next to you on the plane (me) paid 10%- 50% less than you did. If you’re like me and you want to travel well on the cheap then read on.

Here’s how I do it:

1. I decide where I want to go. Then I pick an option 2 and an option 3. Prepare to be flexible.

2. I determine when the best time is to go. I do this by reading Frommer’s or Fodor’s online. I create a list of potential travel dates that are NOT the best time to go there. Most places have a high season, a low season and a shoulder (middle) season. I don’t want to go in high season because everything is atrociously overpriced and crowded. However if you’re going to the Caribbean you probably don’t want to go in the low season which is usually the rainy season. There’s not point in going somewhere and sitting inside all day. I usually choose shoulder season. If you’re going to someplace popular check their tourism and convention authority website calendar. If you’re trying to go the week of a huge convention everything will be overpriced.

3. I determine what hotel I want to stay at. See this article on how to save money on hotels.

4. I start this process months and months in advance. Preferably just prior to 331 days out.

5. At 331 days out I start checking airfares for my primary destination. I write down the airline, dates and flight times. I do this to develop a baseline airfare for my destination.

If you don’t do this how will you know if you’re getting a good deal? And let’s skip to one item. Direct is not non-stop. Non-stop is non-stop and the only way you want to travel. Unless the savings is so extreme, as to make it worth the risk of your whole trip being messed up, always fly non-stop. Obviously if there’s no way to get from Chicago to your destination without stopping then so be it. If you have to make a stop don’t do it in winter.

COTC tip: Beware of connecting times. I see this all the time. I have to connect to get somewhere. The cheapest airfare comes up and it offers me a one hour connecting time. This is probably the minimum required connecting time. Do not do this. Depending on where you are connecting this will probably not be enough time. From the minute the wheels hit the ground until you taxi into your gate and deplane can be 15 minutes or more. Depending on where I’m connecting I leave 2-3 hours. I have only missed one connecting flight ever and there were no other options when I booked it. Nowadays when you miss your connecting flight you may not get onto another flight for a day or more. And if your outbound flight was delayed due to weather and you miss your connecting flight you are going to have to pay for food, hotel and local transportation whereever you are stranded

Where I search: ITA matrix. This website pulls the airfares for most airlines except Southwest. It is your friend. This saves you from having to search each airline website separately. You cannot purchase fares here. I advise that you go in and play around with it for a while. It’s a huge time saver. The key search tool, if you’re flexible, is the “see calendar of lowest fares” this allows you to search a range of dates. Also check Southwest Airlines.

6. I check airfares for my primary destination almost daily. Using ItaMatrix only takes five minutes. Do it on your lunch hour. Do it instead of watching tv. This will save you hundreds or even thousands of dollars if you’re traveling with a family.

7. I am a frequent flyer member and am signed up to receive emails from the main airlines I fly. While most “sales” aren’t really sales I always check the fares because sometimes they really are sales. Also don’t be stuck on flying one carrier both ways. Sometimes a “multiple” carrier flight will come up.

8. If a sale comes up or a super low fare I BOOK IMMEDIATELY. If you do not book immediately the airfare will be gone when you make up your mind. It can be gone in minutes. People are always telling me “I had this great fare but when I went back the next day it was gone.” Airfares change constantly. On American Airlines you can hold a fare for 24 hours. With United and Alaska you can get a refund in 24 hours. The Transportation Department requires a full refund for 24 hours. Another thing is to have the credit card you plan to charge the tickets on with you or have the number, verification code and expiration date available where ever you are so you can book immediately .

Summary:

Be flexible by having several destination and travel date options.
Don’t travel during the most popular times.
Check hotel options so you know if it’s affordable.
Speculatively book refundable hotel rooms.
Start researching early. 331 days out.
Check airfares daily or more using ItaMatrix. Keep records of airfares, flight times etc.
Sign up for emails from your primary carriers and check sale fare emails.
Determine a fare baseline so you know when you see a good deal.
Be prepared to purchase immediately when you see a good fare.
Enjoy your hundreds or thousands of dollars in savings.

Personal anecdote on the merit of planning ahead and being flexible

Last year I decided I was going to take a relative on a trip to Honolulu in July of 2015. We would be departing from the west coast. For months I checked airfares and they were always around $800 per person coach. Out of nowhere in late November I stumbled into a sale where if we went in January 2015 the airfare was half off per person coach. So I had to book quickly. I knew which hotel I wanted to stay at, I checked rates and booked and then bought the airfare. Savings: almost $800. This would pay for a good portion of the hotel room. So by checking early and often, I knew what a good fare was, I was flexible and I booked immediately. In fact I’m here now writing this article. Aloha!