TravelinSperry

Just thought I'd share my story booking on United over the past 15 hours.

6pm last night:
--> Booked Miami to Newark nonstop for $259 one way for a flight departing in 10 days.
--> At 11:30pm I thought better of it and decided to drive up to Ft Lauderdale and rebooked at $184 one way. Even with the extra $25 in Uber costs, I'd still save $50.
--> Cancelled first flight from Miami since I was still within 24 hour period.
--> At 7am woke up and decided not to waste my time going to Ft Lauderdale, so I went online to cancel that flight and rebook the Miami flight. The new Miami flight price was now $159 one way. A $100 savings in just 16 hours. Huh?!

No harm, no foul for me since I was able to cancel the first two flights. But I have to say, this sort of crazy pricing is disconcerting. Who moves prices ~40% in less than 16 hours?!?! Really makes you want to use Google Flights or Hoppers price tracker although I've had very poor results with them both.

How can you trust you're getting a fair price when United moves prices like this in such short periods of time?

jsloan

This is SOP for the airline industry -- all airlines work in substantially the same manner. What you're seeing is the affect of inventory adjustments that run regularly (and more frequently as the flight approaches). They may have had some other passenger cancel on the Miami flight, for example, making their inventory model flip over to offering a discount. Or, they may have been anticipating another booking or two, and they didn't happen, so they lowered the price to sweeten the deal.

Your question about a "fair price" is a loaded one. All of those prices were fair; they were offered to all customers at the same time. You can get the best price by doing exactly what you did -- check often to see what the new price is.

UA has a policy where they will offer you a partial refund if the price drops by more than $100 within 30 days of your purchase (they deduct a $50 administrative fee and refund the rest). So, you have some protection.

TravelinSperry

I hear your point. But the revenue manager moved prices 40% in less than 16 hours. You're saying he was expecting a booking or two last night? Or that a slew of cancellations occurred last night? I find both of these highly unlikely. Rather it is clearly SOP for airlines, but it leaves customers frustrated. Should I book now? How about in 5 minutes? Maybe tomorrow night? They are playing games with their inventory and trying to milk money out of us. I prefer Southwest pricing which is more straightforward and changes less often. And at least when it does, you get that money back (assuming you check often). This sort of dynamic pricing leaves a very bad taste in my mouth. Clearly UA was just playing games last night or the pricing manager is inept.

jsloan

There's likely no "he" involved here -- it's an automated system. I think the former is most likely. What happens is that it has a historical demand graph that it compares against bookings on a regular basis. The trend line for that flight likely was below expectations, so they opened a lower fare class. The only thing that a human had to do with it is setting the specific prices that map to the inventory buckets, and those don't change often. Assuming that this was a non-Basic Economy fare, it looks like they only skipped over one intermediate price: the L fare is about $159, the T fare is about $179, and the S fare is about $259. (There's also a flexible L fare at about $199).

The inventory management system has fairly coarse knobs to use, but your 40% number is more a function of the fact that UA is selling a lot of discounted inventory on that route than anything else. The full fare for MIA-EWR is about $1400, so the price drop was less than 10% of that.

Southwest pricing works in fundamentally the same way as United. You simply haven't noticed it.

Airlines face a fundamental problem: in order to survive, they need to be able to practice (legal) price discrimination. I've seen it written that there is no single price point where it is possible to make money on a flight: if they priced airfare on a cost-plus basis, they couldn't fill the seats. If they price the seats at a point where they can sell them all, they can't cover their costs. Clearly, something has to give.

It's not really much different from any other consumer good. If you're going to get frustrated because you bought a pair of shoes for $150 and then the next week you see them on sale for $100, you're going to spend a lot of your life upset about things that you can't really control.

TravelinSperry

Sales happen, I get that. But this isn't a sale. This is poor inventory control. A sale would be quite different. And has happened to me. I bought a phone only to find a few hundred dollar discount happen a few weeks later for Black Friday. OK, I get it - black friday is a special day. While bummed, I blame myself for buying a few weeks prior to it. But here you do not have a sale or a special day. Just 16 hours... and then they drop the price. Not into the next lowest inventory bucket as you showed. Not even into the one lower than that. But they dropped it 3 buckets! Had they dropped it one bucket, OK - I can see your point. But 3? That's simply poor inventory management imo. And leaves a poor taste in my mouth and distrust going forward.

As for Southwest, I have seen it - but since they offer no change/cancel fees - you can get the difference back (or rebook without penalty).

WineCountryUA

Friday nights are when UA loads schedule changes and with the MAX 9 situation there probably has been some capacity shifts in the network.

I have seen similar issues with WN and have longed learned WN prices can regularly be more expensive than other airlines. If you want simpler, is more expensive better?

UA_Flyer

etiene

Aliquot

I am confused why you keep saying this bad inventory management. Inventory is managed to maximize profit. We have no idea what numbers UA had to justify those changes, but I am sure they had more than you had as one customer trying to buy one cheap ticket.

fumje

Ever heard the saying, don't look a gift horse in the mouth?

Kacee

UA does all kinds of things with fares and inventory that don't make sense to me.

But when they open cheaper inventory closer to departure, it's a pretty fair bet they've done it because their models say that's what they should do to maximize revenue. As others have noted, UA has vast troves of data to support that conclusion.

whlinder

RooseveltL

Normal. I regularly see price adjustments from Friday to Saturday on leisure routes. Check again Sunday or Monday and it will likely be higher. No formula to it just when people buy.

zombietooth

The opposite can happen too. Several months ago, I did a fare lock for a business meeting that hadn't been confirmed yet, but which I absolutely had to make, whatever day it would be scheduled. I got confirmation of the meeting less than 24 hours after I did the fare lock, so I decided to check to see if the price had gone down. I was shocked to see that the cheapest coach fare had gone to over 2K from several hundred, and the flight showed as almost full. I was very glad I had a fare lock, but decided to check other carriers to see if I could see a pattern. Every flight on the day I needed to travel on every carrier (including WN) had gone through the roof. I checked fares every day until the day of departure out of curiosity and the price never went down again.

Dynamic pricing is merely an algorithm trying to balance supply with demand and charge accordingly. There is nothing malevolent in these price changes.

mduell

It's not like they moved fares globally on all routes 40% in a few hours. The lowest available fare for a specific set of markets/dates can and does vary all the time, or can stay they same for weeks.