A Peek Behind the Curtain - How Airline Pricing Works

From a traveler perspective, airline pricing does not seem to follow any particular rhyme or reason. We asked our in-house experts to explain how it works.

What causes airline pricing to fluctuate so greatly?

Airline pricing is highly dynamic and often driven by rules that airlines establish to automatically adjust pricing based on factors such as:

• Demand
  If a flight is selling well flight prices will increase, if demand is low, the price begins to drop.
• Competition
  Variables such as the number of competing airlines flying the same route and alternate travel methods (such as driving or rail) can alter price.

As a result, fares can literally change from one minute to the next.

How does Egencia gain access to flight inventory?

Most Airlines file their schedules and fares through common industry channels. This data, along with the allocated seats per fare level per flight, is then housed within Global Distribution Systems such as Sabre, Amedeus, Travelport. The Expedia Best Fare Search (BFS) search engine combines these schedules, pricing and inventory (e.g. open seats) from industry channels and global distribution systems to build itineraries from one comprehensive platform. Through Best Flight Search, we are able to capture schedules, availability and pricing data for every flight route from and to every airport, flown by every carrier, throughout every day for the next 365 days, resulting in hundreds of fully priced itineraries. Given the enormous number of flights and carriers, no single search on any booking tool can return all possible flight options, so Best Flight Search uses your search criteria to tailor your flight results.

Does Egencia have access to all fares and flight inventory?

Yes, we have access to almost all carriers and one of the broadest selections in the industry.

Why do I sometimes see available seats on an airline website when Egencia shows that the flight is sold out?

There are a few reasons this may happen:

• Airlines prices and available seats change constantly and a time lapse issue may causes different fares to be displayed. For example with only a few seats being allocated at a certain price, the inventory may just have been booked through another channel.
• Some websites may not yet reflect the updated inventory and you may receive a price change when trying to book a flight that other websites show as sold out. This occurs when search engines cache outdated ticket availability for longer periods, which results in "this ticket no longer available" or "price has changed" errors when traveler proceeds booking the ticket. Egencia's Best Flight Search constantly refreshes data to provide the most up-to-date seat availability and pricing as possible.
• In infrequent situations, a small subset of airlines may have limited seats reserved at fares that corporate agencies do not have access to. These seats are almost always reserved for leisure travel and are generally not available for close-in business travel.

Why do other websites sometimes show flights which I don't see on Egencia?

The shopping algorithms of websites are set to favor different preferences such as price vs. total travel time. Some sites may choose to display a particular fare while another website may find that fare is unsuitable for their specific customer set. Since Egencia is focused on the needs of corporate travel, we put more emphasis on flight options conducive for the time-sensitive business travelers and eliminate for example itineraries with multiple connections or extreme layovers. Some of these preferences are also decided by your company's specific travel policy.

How does Egencia ensure that I am getting the best price on my flight?

Once you select the best itinerary for your business trip, the Expedia "Price Protect" feature verifies the pricing and availability with the airline and within the Global Distribution System to return the best price available at that time for your trip. We also check for the cheapest refundable, business class and first class fare, for your itinerary.

Because actions do speak louder than words, we also offer the Egencia Flight Price Guarantee (link to section above)

How does Egencia Flight Prices compare to the industry?

Expedia uses a third-party vendor to monitor the airfare competitiveness of Egencia on top business routes to ensure:

• Egencia provides the best fares in the market to its customers per "The Guarantee," and
• Airline partners fulfill their contractual obligations as it relates to Egencia

Airfare Competitiveness is measured using the Meet or Beat Ratio. This is calculated as the percentage of times Egencia meets or beats the cheapest airfares available on airline Websites. In 2008 and the last two months ending January 11 2009, the Egencia Meet or Beat Ratio was over 98% and 99% respectively. Occasional losses are typically related to the dynamic nature of airfare pricing and are routinely investigated.