Airfare is a product, but it has far more pricing variables than most. Best Buy may slap a price tag on a flat screen TV before the Super Bowl and lower it after the game, but airline ticket prices can -- and sometimes do -- change every day.
Here are nine factors that determine what you'll pay to fly.
1. Price of Oil
This is the big one, because nothing adds to an airline's cost of doing business like the price of jet fuel. In 2011, it became the No. 1 operating expense, zooming from about 20 to 40 percent, and that was after oil prices eased from 2008's high of nearly $150 per barrel. The price is currently hovering around $93, but it passed the $100 mark just after Christmas.
2. Flight Distance
This is common sense, right? The farther you fly the more expensive your ticket will be. But not always! A flight between Los Angeles and Portland, Ore., booked last week for late January, cost about $160 round-trip. But if you flew twice as far -- to Chicago, say -- you didn't pay double. That airfare was only another $14 each way. Remember, several factors contribute to ticket prices, distance being just one of them.
3. Competition
The more airlines, the merrier -- for passengers. Fierce competition means lower ticket prices. Recent examples of more airlines causing lower prices: flights to and from Boston and Denver.
4. Timing of Purchase
When you buy your tickets matters. If you buy at the last minute – typically within seven days of departure, as business travelers do –you’ll pay a hefty premium (which is why airlines love their road warriors). The best time to buy domestic tickets is between three-and-a-half months and two or three weeks before departure. The best day to buy is Tuesday, starting at about 3 p.m. E.T. (which is when all airfare sales have been released and competing airlines have matched the new, lower prices).
5. Timing of Flight
When you fly also matters. The cheapest days to fly, because of low demand, are Tuesdays, Wednesdays and often Saturdays. Expensive periods include holidays like Thanksgiving and Christmas, and other must-fly periods like summer vacations. The Super Bowl can be expensive, too; sports fans have probably noticed this year that January and February airline sales specifically exclude flights to/or from New York-area airports in the days surrounding the big game, for example.
6. Big Brother Factor
You better believe the government gets its cut of airline tickets. This includes the Sept. 11 Security Fee, which will rise later this year from the current $2.50 per flight segment to a flat $5.60 or $11.20 per round-trip flight. And don't forget the “regular” taxes that also take a bite out of your ticket - and wallet.
7. Passenger Appetite
Believe it or not, you do have some control over ticket price, and it's real simple: If airlines price their tickets too high, people won't fly. It works, too; last year, individual airlines tried to raise ticket prices on 12 separate occasions, but competing carriers said "no" and the hikes didn't happen. Those naysaying airlines knew the higher prices wouldn't fly with their customers, and if people don't fly, airlines don't make money. Note: Three of those 12 hikes were considered “successful,” but they were very narrow in scope.
8. Empty Middle Seats
Why is an empty seat a factor? If the airlines can't fill it, prices drop, which is the last thing they want. So, over the years, airlines have cut capacity and even routes, all with an eye toward filling every seat on every plane.
9. Fees
Although fees aren't strictly part of an airline ticket, they might as well be on some airlines -- unless you’re the rare nudist traveler who never gets thirsty. Case in point is Spirit Airlines, which charges for checked bags -- as most airlines do now -- but also for carry-ons. And soda. And coffee. And even water. We’d love to say this is a solo act, but Allegiant does the same thing, and so (in some cases) does Frontier.