Last week I wrote a special Friday post tearing apart the way the media misinterpreted a report showing that Sunday is the cheapest day to buy plane tickets. As annoyed as I was to see it covered so poorly, I was even more annoyed to see the most interesting data buried beneath those mindless headlines. There actually was some pretty helpful information in the report surrounding how far in advance you should book your ticket.
First, a couple caveats. We have to keep in mind that this looked at tickets issued between January 2013 and July 2014. Since it’s not a single year of data, there is some seasonality here. For example, we have two summer seasons being booked but really only one winter holiday season. Also, unlike looking at the day of week information, the difference between leisure and business doesn’t make the data worthless. Business travel tends to be booked closer to departure when the fares are higher while leisure travel is booked further out when fares are lower. Sure there’s some mixing going on here, but the data should still hold pretty well.
Let’s start with the domestic market.
The Airline Reporting Corporation (ARC) data shows that for domestic travel, booking 57 days in advance is optimal. Let’s not take this too literally though. The point is that if you book about 2 months out, you’ll get the best deal. That makes sense. The price gets higher the closer you are to departure since seats become scarce and the last minute traveler is willing to pay more. But it seems strange that if you book more than 2 months in advance, the price will be higher, right? There’s a good reason for that.
Most airlines begin selling tickets about 330 days before departure. That means today you can buy a ticket for late September 2015. You might think that when schedules become available for sale, the airlines would have spent all kinds of time perfecting them and optimizing fares. That couldn’t be further from the truth.
In reality, the airlines pay almost no attention to schedules for next September when they go up for sale. They put out a schedule that’s likely to somewhat resemble what they want to fly, but you can still expect a lot of obnoxious schedule changes between now and then. They also aren’t really actively controlling which fare levels are available for sale on any given flight. They certainly aren’t putting any sales out there. The reason is simple. Nobody is booking domestic flights for next September right now. It’s just too far out there.
As we get closer to departure, the airlines start seeing more bookings come in and they begin to more actively manage the availability on those flights. They’ll also think about filing sale fares for off-peak periods. At the same time, more leisure travelers begin coming into the window when they want to start booking. Lower fares and more demand mean that the average fare is going to come down.
At about 2 months out, ARC shows that fares start creeping up, but it should be pointed out that it’s not much of a climb at first. As flights start to fill up more, the more popular ones will see their cheapest fares shut off. So the average fare starts to climb slowly. About 21 days in advance, however, fares shoot through the roof.
The reason for that is because that’s when most advance purchase rules begin kicking in. Before, the cheapest seats are only blocked from flights that are filling up. But at 21 days out, a lot of the cheap fares become ineligible to book due to the fare rules. It’s a hard cut-off. More of that happens at 14 days and again at 7 days. Even an empty flight will only sell a ticket at a much higher fare 2 days out because the fare rules dictate that. And that happens because last minute travelers are willing to pay more. The airlines don’t want to dilute that revenue opportunity.
Now take a look at the international chart.
You’ll see that the dip after schedules are first filed is much less shallow here, and the cheapest fare is found much further out (171 days to be exact). International schedules change much less often, and carriers may start paying attention to those flights sooner. In addition, people simply book further in advance on international flights because international travel requires a lot more planning. It could be a big summer vacation, or maybe it’s a one in a lifetime trip to visit family. No matter the reason why, international travel gets booked earlier.
Fares also begin to climb dramatically more than 50 days out. That’s partially because when people book earlier, planes fill up more quickly. But I’d bet there’s also the issue of huge advance purchase rules on business class tickets. I’ve seen business class fares with as much as a 90-day advance purchase, really targeting someone who is truly a leisure traveler. When those get cut off, fares go up.
This is all nice, but what does it mean for you? Well, book a couple months out for domestic travel (or really, between 1 and 3 months), and you’ll be in the sweet spot in most cases. That’s probably sound advice if your plans are firm. Of course, it could be different if it’s a holiday or a big event. In those cases, you may want to book further out just for peace of mind if nothing else.
Internationally, you can book further out if you want, but fares aren’t going to change all that much until a couple months in advance. That may impact business class travel more than coach, but it’s still good. If you know your plans two months out, you might as well buy your tickets.
(Before I go, keep in mind that this is never 100% accurate. It’s pretty general advice, so my advice from Friday’s post still stands. Look for tickets when you’re ready and buy if the price works for you.)
Good stuff. Since you have ARC data, you could start a second blog just discussing booking trends. : ) That would be awesome. How have VX bookings changed since the move to DAL?
Have you concidered controlling for length of haul for the domestic graph? I would imagine that 100+ skews heavy LH and it start to mix LH/MH/SH as it gets closer to 21 days prior (bringing down the overall average fare until the AP restriction hit). It probably wouldn’t change the overall story, but the line might not bend down as much.
Another interesting thing to mention is that Southwest doesn’t open their schedule until ~200 days prior. Southwest may not be as disruptive as they once were, but it gives even less incentive for network carriers to offer discount fares far out in the booking curve.
Joe, theres not that much detail in the ARC report, its here: http://www.arccorp.com/email/2014ARCAdvancedPurchaseAnalysis.pdf
Though an interesting point about WN not putting their schedule out as far in advance as the other airlines..
Joe – Nick is right. I don’t have ARC data. I just have that report they put out. I can’t control for anything because I don’t have the raw data.
Our local Sunday paper yesterday picked up a story from some woman at the L.A. Times who said it was to late to buy low fares for Thanksgiving and Christmas, then gave two past dates as the dates you needed to buy those tickets. I’m assuming the lowest fares has an advance purchase, and those two dates were the last days for that group of fares. One might think there were tons of cheap fares for the two major end of year holidays, but I”m sure if you checked, the lowest fares would have been gone already way before those two dates.
People need to check way a head and if you see a fare you are willing to pay, then buy it then.
Interesting point. I could bet there were never any cheap tickets for holiday travel to begin with – you get reasonable and expensive :) It’s just a matter of how expensive can they get away with…
Some good information. Thanks.
Sometimes the booking windows are a self fulfilling prophecy. I do a lot of international travel on miles, so those tickets I will tend to book 9 to 11 months in advance. But I know if I need a domestic repositioning ticket, booking more than 60 days out is going to end up costing me money. So I wait.
As an aside, if someone is looking at domestic Australian ticket sales, I’m the weirdo who booked revenue tickets 5 months out. What can’t be seen in the data is that the domestic flights are part of a larger trip that I booked literally when the schedule opened.
Great! Monday morning and all I need to get me started is something about fare rules.
There will be a day with fares when there won’t be any rules to speak of. We’re getting there. Domestically, round-trip fares seem to be disappearing. One-way…what more do you need?
Advance purchase rules…who cares. To me this is something I would have thought would have disappeared with deregulation. Airlines use them to NOT sell this or that, like they couldn’t NOT sell this or that were it not for a plethora of rules? That’s crazy. Just don’t offer the fare. You can’t sell it if you don’t offer it. Whatever fare you don’t want to sell, don’t offer it. What reference to 30-, 21-, 14-, 10-, 7-, 3-day rules do you need? NONE.
Like, you have to list blackout dates? Don’t offer the fare any day you don’t want to offer it! You don’t need rules to do that.
Rules for re-selling tickets, getting refunds, changing itineraries, fine. Rules for who can sell a ticket, and where that might be. Fine. But, please kill off every other rule that only impedes an efficient buyer-seller relationship. When an airline offers a fare, why shouldn’t it be for the taking. If you don’t want it taken, don’t offer it…but, I’m repeating myself.
JayB the 30, 21, 14, 7, etc fare rules are exactly what you’re saying. The airline is saying “at thirty days in advance we’re no longer willing to offer tickets at this price for sale.” Same thing with blackout dates. While Amazon and Target has rules of when they’re willing to offer a cheap TV, they don’t tell you the rules and logic they use. The airlines on the other hand make the rules publicly available for travel agents and others to see.
Airlines could be just like Amazon and say if you’re purchasing a ticket between ABC and XYZ on January 20th for flying on April 20th, the price is $450. But that’d actually give the buyer less information than they have now.
The airlines also are willing to provide a better price if you’ll give them your money and express your desire to fly further in advance. Amazon does something similar with their Subscribe and Save program. You tell them that you’re willing to purchase a product every other month, and they’ll give you a discount since you’re more likely to buy it, and they also get valuable information on how much of that product they need to buy in the coming month.
JayB – Actually, I would think that travelers would prefer the advance purchase rules to the alternative. The airlines put these hard fences in place because they didn’t have systems that could optimize pricing for each traveler. The best way to make the leap was just to have broad rules that controlled behavior. But as the airlines get smarter systems, they can control these things better and the rules become less important. The problem then, of course, is that it gets to the point where every customer gets offered something differently. So having the hard rules in place actually makes it more uniform and easier to understand (as hard as that is to believe).
And what about booking award travel? Perhaps it’s impossible to pin down dates for how far out, due to individual airline differences, but perhaps worthy of another article, please?
I got a United award travel RT to Cusco, Peru ultra cheap when I booked 6 months out, but now, with Gold status, I can only find “Standard Award” availability to hum-drum places like San Francisco and Missoula when trying to book 10-11 months out. Could it be that award travel “prices” follow the same price curve that we see for dollar purchases?
Vickie – The best time to book award travel is actually pretty close to departure. Airlines start to open up more seats when they see what their actual expected loads are. That’s why your best bet is to wait until the last minute. Kind of funny, because it is the exact opposite of what most people think when it comes to award travel.
Of course, with award travel, the best time to book is whenever there’s availability at the lowest award level. (With most frequent flyer programs, that means *any* time there’s availability if you’re booking partner flights.) With award travel, you know that the price will never go down from the lowest award level.
Is this advice applicable globally as well? Say I live abroad, and I want to go to the US – should i buy in the same timeframe as well?
Jonathan – I don’t have the hard numbers, but I’d say it’s probably not terrible advice for other places in the world.