Ever wondered how your airfare is calculated?

[Kalboz]

What do airlines mean when they tell you the reason you did not get zero fare or a low fare was the ‘dynamic pricing’? Presenna Nambiar explains.

Airlines price their tickets based on three things: demand, competition and inventory.

First the demand for the flight is judged, then airlines look at what the competition is offering, and last of all, they allocate the number of seats for each fare segment according to the demand for it.

MAS, for example, has 16 fare categories while AirAsia Bhd's long-haul, low-cost carrier AirAsia X has 13.

The best part is, MAS has 2.5 million fare permutations to draw on.

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