Introduction to Airline Inventory

Let’s do one more back to the future review of a popular series of posts, this time on how to make use of all those fare buckets and similar things I touched on in my introduction to using ITA’s advanced routing language. Today and next week I’ll show you how to find low-cost airfare options by making use of airline inventory data. Even if you don’t have access to all the different fares available (a service like ExpertFlyer can help you with this) the availability in each fare class or “bucket” is usually enough to at least give you a sense of whether you’re getting the best possible deal.

Let me remind you that “fare class” or “booking class” is entirely different from “cabin class.” The cabin class is the class of service you can expect on the plane, whether first, business, coach, or whatever silly name an airline has concocted in recent years. Frequently there will be some correlation. If your fare class is F, then that always means first class. Similarly, Y always means coach or economy class. However, some airlines have rules that allow a Y fare to get an instant upgrade (with conditions) to first or business class, and even lower fare classes can get upgraded during the window for elite upgrades close to departure.

There is also a lot of variation in the letters used for discounted fare classes, like Q, N, L, etc., and how they’re ranked. You’ll need to check the airline’s own site for that information.

Fare Classes

I mentioned at the start that fare classes are sometimes referred to as buckets. This can sometimes make them easier to understand. An airline is always trying to get maximum value for its seats, but it has to try to sell them all before departure or they will become worthless forever. Just like a grocery store puts stuff on sale to get food out the door before it spoils, an airline will sell tickets at a range of prices. (Check FlightAware.com to see the range of prices for your particular flight.) However, unlike a grocery store, those prices seem to go UP as the departure time approaches and they become increasingly close to becoming worthless. Why does this happen?

Lets ignore for a moment that each fare bucket has it’s own fare rules. Instead, imagine that the airline knows in advance roughly how many tickets it will be able to sell at each price. If a plane holds 95 people, it may determine it can sell 100 tickets (assuming 5 no-shows) and it will assign the sale prices in advance. If there are 10 fare buckets, each bucket gets a certain number of available tickets. When you go to buy a ticket, you’re very likely to buy the cheapest one, and as those cheaper tickets disappear, you’re left with more expensive options.

One reason this process works in reverse for airlines is that you can’t easily go out and buy more planes and half fill them, whereas it’s a little easier to increase your weekly order of apples by a few dozen. In addition, people don’t need an apple that very day. At least not that badly. But the closer you get to departure the more likely you will run into last-minute business travelers with expense accounts chasing limited inventory, so airlines actually have a lot of leeway to raise prices.

Correlating Fare Class to Cabin Class

Sometimes overlap exists with the full-fare, unrestricted buckets. So if an airline has 6 first class seats available, it might list 6 tickets in the full-fare F bucket AND 4 seats in the discounted first class A bucket. That doesn’t mean there are 10 seats. Instead, as A tickets are purchased, the number decreases in both the F and A buckets. Similar inventory changes occur with economy tickets as the Y bucket will have many more seats that could alternatively be bought as M, W, or G fares depending on the rules of each class (we’ll get to rules later). The unrestricted Y bucket will always be largest, however the most you’ll ever see at one time is 9. Even if there are 20 seats in a bucket, the counter just stops working at 9.

The breakdown of fare classes looks something like this example from United Airlines. The table is from the old pre-merger United, but I like the layout better. This is only for instructional purposes. You’ll notice that each cabin class has its own list of fare classes. To understand the hierarchy, just read top to bottom and left to right. An F fare ranks higher than an A fare, and a Z fare ranks higher than a Y fare even though the first is discounted. Normally hierarchy doesn’t matter much unless you’re in an upgrade or standby situation.

Fare Rules

But let’s get back to fare rules. Each fare has different rules attached to it that include what days (and sometimes times or months) you’re allowed to travel, how it can be combined with other fares on a multi-leg journey, and a deadline for purchasing it, e.g., three weeks in advance. When you’re researching ticket prices and see a $100 fare one day that doubles to $200 the next, that doesn’t necessarily mean someone bought up all the $100 tickets. It could just mean your $100 ticket is no longer available because you can’t meet the fare rules for the particular day you want to travel.

G, K, and L fares might need to be booked 14 days in advance, and now it’s only 13 days out. So no more G-, K-, and L-class tickets can be sold even if that fare is still published and no tickets have been sold between yesterday and today. It always bothers me when my parents wait until one or two weeks in advance before telling me they’ll be home for a visit because then the price goes up and I can no longer afford it.

On the other hand, it could still be three months out, but if the fare gets replaced with a new one that has the same rules but a different price, the cost of a G-class ticket might go up dramatically. So these are two clear ways ticket prices can change even without any change in the actual number of tickets sold.

Essentially you are fighting against other passengers, who might buy up the cheap seats, and the system, which might decide that those cheap seats are no longer permitted to be sold. There are also small changes in availability performed by the inventory management department at the airline. In periods of high demand the low-class buckets will be thinned, and in periods of slack demand they will be filled out. Why does this make any sense? Why are airlines discounting a perishable product up front rather than waiting until the end when it’s at risk of becoming worthless?

The Mysterious World of Inventory Management

Seats on an airplane are mostly fungible, meaning they can be interchanged without any difference between them. Maybe not the actual seat you sit in, but everyone will get from A to B and the airline doesn’t guarantee seat selection anyway. Oil, corn, gold, and other commodities are also fungible. Dollar bills are fungible.

If you could get that same ticket at the last minute for half price, everyone would wait and there’d be a mad dash at the counter on the day of departure. Unlike an apple, which really does start to decrease in quality every minute it sits on the shelf, the ticket will get you there whether you buy one month in advance or one day. However, the airline knows that as the departure date gets closer, business travelers who are still buying tickets really need to get where they’re going on time. People who buy far in advance are typically leisure travelers who just pick whatever’s cheapest. So airlines tend to be extra competitive in advance and can hold their customers captive when it’s almost time to go.

Your best bet if you find a fare you like and aren’t ready to buy is to figure out what fare class it uses, the associated rules for how long it will remain available, and how many of those tickets are left so you don’t get left out in the cold. This still doesn’t save you if the fare gets replaced, but it’s the most information you’re going to get.

Identifying the fare class is tricky with online travel agencies (OTAs) like Orbitz or Expedia because they generally don’t share that information with you. Sometimes at the end of the booking process, right before you confirm your purchase, there will be an option to view the rules associated with your ticket. This may include your fare class or at least a one- to six-character fare basis code like “Y” for an unrestricted Y fare or “TW14RT” for a discounted T fare. The first letter often gives you a clue. Another option is to price out your fare using ITA and see if the price matches what you’re given by the OTA. ITA will always tell you the fare class, so if the prices are the same, it’s likely you’re being given the same ticket. Of course, I generally prefer to book with the airline itself if I can get it to price out correctly, and those will give you the fare class, too.

What about determining availability? ExpertFlyer or KVS Tool will help you with that, but your options for getting that information for free are somewhat limited. United has recently cut back on what it provides its customers, which has also affected other services like ExpertFlyer that simply scraped the information off their screen. I’ll talk more about these options for finding fare class availability on Monday.