If it’s changed 2,472,916 times since January, no wonder we need a site like Yapta

The most volatile airline ticket prices in America are between Atlanta and Las Vegas, a new survey by Yapta has found. Fares between those cities changed an astonishing 2,472,916 times since the beginning of the year. That’s roughly once every six seconds.

No wonder ticket prices drive us nuts. And no wonder we turn to sites like Yapta to track fares.

No human can do it.

Here are the top 10 domestic city pairs with the most volatile airfare prices this year. This data is across all flights (one way, round trip, multi-city) and seat classes.

1. Atlanta (ATL) to Las Vegas (LAS) – 2,472,916 price changes
2. New York (JFK) to Las Vegas (LAS) – 2,412,759 price changes
3. New Jersey (EWR) to Las Vegas (LAS) – 2,377,668 price changes
4. Chicago (ORD) to Las Vegas (LAS) – 2,215,994 price changes
5. New York (JFK) to San Francisco (SFO) – 1,959,873 price changes
6. San Francisco (SFO) to New York (JFK) – 1,862,270 price changes
7. Los Angeles (LAX) to Honolulu (HNL) – 1,740,380 price changes
8. New Jersey (EWR) to Orlando (MCO) – 1,725,727 price changes
9. Los Angeles (LAX) to New York (JFK) – 1,641,397 price changes
10. Boston (BOS) to Chicago (ORD) – 1,490,271 price changes

And here are the least volatile city pairs …

1. Ablene, TX (ABL) to Las Vegas (LAS) -1 price change
2. Clarksberg, WV (CKB) to Portland, ME (PWM) – 1 price change
3. Missoula, MT (MSO) to Kona, HI (KOA) – 1 price change
4. Richmond, VA (RIC) to Louisville, KY (SDF) – 2 price changes
5. Pittsburgh (PIT) to Gulfport, MS (GPT) – 2 price changes
6. Charleston, WV (CRW) to Charlotte, NC (CLT) – 2 price changes
7. Fort Lauderdale, FL (FLL) to Covington, KY / Cincinnati (CVG) – 2 price changes
8. Columbia, SC (CAE) to Louisville, KY (SDF) – 3 price changes
9. Los Angeles (LAX) to Shreveport, LA (SHV) – 3 price changes
10. Duluth, MN (DLH) to Norfolk, VA (ORF) – 3 price changes

I asked my contact at Yapta to explain the numbers a little:

I really wasn’t surprised that Las Vegas turned up in the top four most volatile city pairs. It being one of the more popular U.S. destinations, we have a lot of users tracking flights to Vegas.

You’ll notice that a lot of the other city pairs are also very popular U.S. destinations, so there’s lots of airfare tracking activity around these markets. That said, a number of major airlines also serve these key markets, so pricing is very competitive and therefore more volatile.

So how do you adjust your fare purchases based on this list?

Well, if you’re flying from one popular U.S. markets another popular U.S. market, the numbers illustrate that it pays to track prices.

Fares move up and down quite rapidly between these particular destinations.

For example, let’s say that you live in New York and you know you’ll be visiting Las Vegas for the 4th of July. Based on these numbers, I would use Yapta today to start tracking prices on the specific flights you want. That way you would almost be assured you’ll see a price drop that you can take advantage of.

As I review these lists, I have an even more basic question: Why is this allowed?

If grocery store prices changed once every six seconds, people would be rioting in the streets. In fact, it’s hard to think of any other consumer product with such volatile prices. Even gas prices don’t change this frequently.

And so I wonder — who is letting this happen, again? And should it be happening?

All the free marketers out there, what say you?

(Photo of Hartsfield skylight: John.P/Flickr Creative Commons)

  • Michelle B

    Actually the most suprising thing to me is that there is a flight from Missoula, MT (MSO) to Kona, HI (KOA)!

  • Sarah Di

    @Michelle B It’s a 2 stop flight with layovers in LAX and SLC. I’m not surprised at all!

  • Joe R

    I worked with a programmer once who maintained part of the pricing system for a major airline. The number of changes are a pretty good indicator of what happens if you let a computer constantly adjust prices based on supply and demand.

    SHOULD they be able to change prices like that? We don’t live in a culture where “should” or “is it right” come into play, sadly.

    CAN they do it? Yep, so they do.

  • Carver

    @Chris

    As one of those free marketers, the answer is easy. Certain items are very market sensitive while most items are not. For a variety of reasons, we have a gut feeling for the fair price of most goods and services. Consequently, that feeling acts as a break against fluctuating prices. Also, most items have what economists term substitute items. If beef rises in price, chicken consumption increases.

    Airline tickets have neither. There is no gut feeling as to how much a particular flight should cost, and unless the flight is short, there are no practical substitutes to flying. E.g. no one drives across country because of the cost of flying.

    Airline tickets should be compared to a volatile stock. Without the various damping forces, both will have frequent fluctuations.

  • Doug

    Here’s the thing, though–as Chris notes in the quote, the more volatile fares are the more competitive ones. Why should we praise the 1,000 mile trip from Abilene (ABI, by the way, not ABL) to Las Vegas cost $533 (one stop) over the non-stop from Atlanta that’s $375?

    (Random search, June 15 to June 22)

  • David Z

    And if someone notices, has there been an airline that survives using, say, single-tier pricing catering to the travelling public? Something like one single price for economy tickets, another for business and a third for first class.

    I mean, we can continue comparing airline ticket prices to tangible items like food, more so insisting airlines should function like them. But if their business model really won’t allow them to survive under such conditions, more so when others change prices as often as one changes clothes, then why insist?

    OTOH, we don’t have to feel completely frustrated about it. We can learn to understand even a just a wee bit how this goes, and maybe use it to work for you.

  • James

    It’s not a free market. It’s too hard to start a new airline, or even get a slot at a popular airport for a competitor to “join” the market to be defined as remotely free. Also, buyers have only limited power to dictate terms, while sellers have much power (Saturday night stays, etc.), which is also likely related to the inability for competition to enter/exit easily. One good phrase that helps define “fair market value” which implies a fair/free market is what “a willing buyer will pay a willing seller, neither under compulsion to buy or sell, both having reasonable knowledge of the relevant facts.” Do you think that exists? I don’t believe a buyer can meet the last part of that.

  • Roberto

    On the plus side, perhaps this explains why people still think that their ticket prices are getting jacked up by “cookies”. I mean, if the fare changes every 6 seconds, and if clearing your cookies takes 5-10 seconds, the price really, honestly, could have changed on you. And the cookie clearing was just coincidental timing.

  • xuxasdad

    @ Chris

    For example, let’s say that you live in New York and you know you’ll be visiting Las Vegas for the 4th of July. Based on these numbers, I would use Yapta today to start tracking prices on the specific flights you want. That way you would almost be assured you’ll see a price drop that you can take advantage of.

    The above example has no merit at all and should not be used as an example to ‘watch and wait’ for fares to come down.
    Reason is simple, as noted in your article, LAS is a very busy market. Collectively probably more hotel rooms per square mile than anywhere else in the world. Rates at these hotels are based on yield management (for the most part) more rooms available, the lower the price. The less rooms available the higher the price. It is a fair assumption that more people will book when hotel rates are the lowest, usually the further out more are available, the shorter time out the less available. There is, for the most part, a direct correlation between hotel rooms available and air seat availability. July 4th is a holiday when many people travel. In fact, the weeks before and after July 4th are one of the busiest travel periods of the year. The closer you get to holidays the less airline seats and hotel rooms are available. Simply put, watching and waiting when your travel dates are over a peak travel period could be a dangerous way to go unless not going is also an option.

  • Steve

    “As I review these lists, I have an even more basic question: Why is this allowed?”

    Chris, with all due respect, I think the question is “why *shouldn’t* it be allowed?” And I can’t think of an answer. Yes, airfare prices change a lot. I don’t see what’s necessarily so bad about that.

    As Doug said, the more volatile routes also tend to be the more competitive ones. Would it be “fairer” if the Atlanta-to-Las Vegas route just decided to hike the price to $533 to match the Abiliene-to-Las Vegas route, but apply that price universally? Maybe, depending on your definition of fair. Me, I’d rather have a chance at paying a lower price.

  • carver

    @Steve

    You are 100 percent correct. I’m flying to LA tomorrow. The fare was $100+ each way. I waited and it dropped to $75. The dynamic nature of pricing helped me in this case.

    @xuxasdad

    Wait and see is by definition a gamble. Like any gamble its all about playing the odds. I agree that I wouldn’t play the odds on a highly desirable routing. However, sometimes, the yield management predictions are off, the travel providers price their products too high and sell fewer seats/rooms and have to come down at the last minute.

  • TNT

    My first instinct is “so what?” Yes, a fare price change every six seconds seems like an inordinate amount of adjustment.

    But there are keep pieces of information missing:
    1) price flux – the amount the prices are changing
    2) market trends – how predictable is the market?
    3) “change threshhold” – what constitutes a change?

    Knowing that the commodity is changing seems obvious – predicting it and quantifying the movement is far more valuable.

  • http://www.air-savings.com sonnyc

    I am not one bit surprised. Las Vegas is one of the most popular destinations in the US, even with the recession and everything. I am glad consumers are maximizing their savings by checking the airfares frequently.

  • JasonZ

    With all due respect – this is a classic example of using statistics to mislead. Not intentional, I’m sure, but a byproduct of just not thinking things through. In April 2010 there were an average of 12 flights/day to Atlanta. (McCarron airport website has a spreadsheet you can download.)

    Airlines can book tickets 12 months ahead and need to set and adjust fares for all of them. On a single day, 365 day’s worth of flights can be altered. 12 flights/day times 365 days is 4380 flights.

    Simplying mightily, assume four fares per flight: F, Y, and two discounted excurson fares (7-day and 21-day advance). That’s 17,520 alterable fares. Suppose they altered each of those fares once each day. That’s 2.1 million changes. Since we’re working on the back of an envelope here, that’s close enough to the 2.4 million changes you mentioned.

    That’s once a day. Suppose they altered them in the hour after trading on jet fuel futures closed, so they were being reasonable and attempting to price-in anticipated fuel prices at the time of flight. Makes sense, doesn’t it?

    Chris, I really do expect better of you. Use numbers to illuminate, not to enrage.

    And no, I don’t work in the airline industry in any way, shape or form. I just get steamed when I see people misusing numbers.

  • Carver Farrow

    @JasonZ

    That’s why it’s said there are lies, damned lies, and statistics. Although in fairness to Chris, unless you are mathematically or scientifically inclined, most people, including journalists, just take mathematical and scientific jargon at face value without understanding or further analysis.

    Its like the people who get fooled into signing fake petitioner to ban Dihydrogen monoxide just because its odorless and colorless and is

    A major component of acid rain;
    May cause severe burns;
    fatal if inhaled;
    corrodes metal;
    erodes natural landscape;
    etc.

  • http://www.futuregringo.com james

    My opinion is so what? The fares weren’t strictly trending UP all bazillion times. Airlines are competitive with pricing and constantly matching sales and offers. That’s a GOOD thing. Why would you want to cap that?

    Anyone who flies even moderately knows about what price to find. From Denver to Vegas it’s between $180 and $240. L.A. is $260ish. To chicago it’s $160 to $250 depending on my flexibility. Plus with tools like Kayak.com you can see the average fares purchased over the past six months or year – thus getting a ballpark idea if you’re getting rock bottom or moderate price.

    Yes the prices changed, but for each airline there’s many subsets of fares, classes, rules and flights. There’s a lot to complain about with airlines, but to me this is definitely not one of them, or conversely something I LIKE about airlines.

  • http://www.futuregringo.com james

    After I wrote that I scrolled up and saw TNT said “So What” first
    So i’ll just add it a third time :)

  • http://meyerweb.com/ Eric Meyer

    A major missing piece to the data (as presented here, anyway) is by how much the fares changed. 2.5 million changes, each in the dollar range, is less of an eyebrow raiser than 25 changes, each in the five hundred dollar range. Without that piece, it’s hard to form a concrete opinion.

    Pursuant to David Z, aren’t airlines like JetBlue, AirTran, and so on based on non-volatile ticket pricing? If so, there’s your point of comparison.

  • http://geological-supplies.com Martin

    If you keep your eye on the price of apples in the store or market, you’ll notice that there’s a different price for different types of apple, that this price can fluctuate from day to day, and that it varies wildly from store to store. It wouldn’t surprise me if, given the number stores in a city the size of mine, the price of an apple changed a few million times a year. Perhaps we should start a riot on the streets.

  • http://www.dirlatino.com Ricardo

    If an airline ticket costs say $500 and the guy sitting next to me paid $100, we both fly the same airline, same service, same flight attendant, same bag sizes, same leg cramps, same bag fee. Then I “feel” ripped off. If all prices were the same per flight then I would not “feel” ripped off, I would only complain about whatever there is to complain. So from a consumer perspective this system leaves a bad taste in your mouth. Just because you can do it, does not mean you should. It needs regulation since now airlines are allowd to charge “incremental” fees for anything. Bags, drinks, pillows. What’s next, bathroom?

  • carver

    @Ricardo

    Would you similarly feel ripped off if you bought the same car from the same dealership but your friend negotiated a better deal than you did? Same thing.