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How do airlines price tickets? | CNBC Explains

4260 ratings | 351120 views
To the average buyer, airline ticket prices appear to fluctuate without reason. But behind the process is actually the science of dynamic pricing, which has less to do with cost and more to do with artificial intelligence. CNBC's Tom Chitty explains. ----- Subscribe to us on YouTube: http://cnb.cx/2wuoARM Subscribe to CNBC Life on YouTube: http://cnb.cx/2wAkfMv Like our Facebook page: https://www.facebook.com/cnbcinternational Follow us on Instagram: https://www.instagram.com/cnbcinternational/ Follow us on Twitter: https://twitter.com/CNBCi
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Text Comments (144)
Aotearoa Excubitores (14 days ago)
So does this mean that the AI decide the profitability of airline industry ?? Now i know why i should delete my browsing history after did my booking
Samuel Dormervil (15 days ago)
How about, fuck that, I would rather drive
Dennis Pietrandrea (15 days ago)
Flying usually isn't a choice. If you got somewhere to be and it's more than a 8 hour drive it's usually worth it to just fly.
Ice Karma (17 days ago)
No mentions of "price discrimination"?
Andrew Lau (1 month ago)
for example in 3:03, is it possible for passenger in flight from London to Bogota ? So the passenger will keep sitting in the plane in Miami airport and then continue to fly to Bogota? Or the passenger do get down from the plane, wait for a while in airport and take the next plane to Bogota (under the same company flight). Sorry, I'm just confused and like to be enlightened from the wise :)
Alimah B (1 month ago)
I literally just told myself before watching this video that airlines clearly raise prices in hopes of causing anxiety. When you see the price continuing to go up, you feel that the hikes will be constant and that you must book now before you look tomorrow and it’s up by another $200.😯🤔🙄😡😡😡😡🤬🤬🥵
grediuce (1 month ago)
Actually you are good,through different videos you made.
Tsetsi (1 month ago)
Is this boy egyptian?
Tsetsi (1 month ago)
Excellent contnet
Ahmad channel (3 months ago)
One of the best channel on YouTube. Thank you so much for your effort and this amazing content.
Tech Coach (3 months ago)
Incredible video, I loved it.
SuntzuMocro (3 months ago)
Good video not chitty at all.
dyremose (3 months ago)
The whole cookie thing is not true, when you make a reservation in the amadeus system you select a letter which corresponds to a price level. This price is always the same as the one the costumer sees on the website
Aman ForYou (3 months ago)
👍👌
이은굥 (4 months ago)
Kayak is the best lolol....
Kenneth Vermudez (4 months ago)
I’m not a math wiz or genius or somewhat smart but wow sure sounds like math equations or formulations creates great unfairness in ticket pricing.
susanta malik (4 months ago)
Nice video. thanks from team: Flightsbird.com
Joseph Noel (5 months ago)
I like your video also your presentation on this. Thanks from team Flightsbird.
utkarsh singh (5 months ago)
One website can access only cookies from browsers which has been saved by that particular website. Can't believe such a big news channel do not verify their content for correctness.
Munish Saran (5 months ago)
Nice Explanation
tourtravels (6 months ago)
The Norwegian airline phone number 1-888-324-1990 helps people a lot in booking process. Book your tickets through this number and you will get the top class services.
Sam Samoa (6 months ago)
There is no air-fuel price as commercial jets run on compressed air!
Ntandoyenkosi Zungu (6 months ago)
QR 🤗
Venkatesh babu (6 months ago)
Look at the amount of dirt on the wings and they look dark paints. So much dirt in air. Image the number of flights it has taken.
Hau Ho (6 months ago)
Star buck - apple - google is big international big name company — that why China communist party love to control ; if they want them to success they will success - which government don’t want to to control big companies like google . star buck . Facebook - and more : they got the bone in their hand - if they don’t obey they don’t get the bone
Tom Jardine (6 months ago)
Flights are usually cheaper if you book in advance
Alimah B (1 month ago)
That is not true. You are convinced of that because once you book you are not likely to continue checking because you are booked and confirmed and if you do it will be right before your flight when they hike prices again. Also, they play with the numbers based on your searches (as he mentioned). Thus, they likely have an algorithm in place that will display higher numbers to you so you feel special. Side personal fact: I live in NYC. Everyone tells me that Lyft is cheaper than Über. I find that Über is always cheaper than Lyft so I had a friend who was with me put the same destination location into both apps and just as I suspected, her Über was higher cost when Lyft was higher cost for me. My common sense told me that Über uses an algorithm that gives certain clients cheaper rates. I have a business account with Über and usually spend $500 or more a month. I analyzed it as Über valuing my business more than the average person because of the amount that I am likely to spend. Technology allows them to beat us, period.
calypso (7 months ago)
What apps where you using??
Samuel B (7 months ago)
nothing is better than Google Flights. I’ve tried all those other websites that “compare” prices, and the main airline websites too but the webpage is messy and not too organized. Google flights is very easy to use, and the price includes the taxes and fees. I’ve booked many flights from my phone. Not sure if the cookies rumor is true but just to be safe I go incognito on my web browser and use Google flights. Best prices as well
Taufik Taufik (4 months ago)
Try comparing the prices using traveloka.com you’ll happy with the results
Hela Asgard (6 months ago)
Samuel B when you go incognito Google (or Microsoft) records everything, incognito only protects you from your family or friends LOL. Google is your worst enemy. I've never found a cheap flight through them. Best is to check websites directly and yes, ALWAYS clean cookies, it's not a rumour, it's a FACT. Watch "Do you trust this computer?" and you'll understand everything.
gaurav mishra (8 months ago)
Wow .hub of knowledge
Ivan Dmitry (8 months ago)
To bad, your not getting my MONEY .
Reservations Empirical (8 months ago)
Same algorithm used for hotels also
12 GPM (8 months ago)
The EU should ban Hidden City Pricing
Dominator SID (8 months ago)
What's your height brah?
phalipia gameing (9 months ago)
pan am was the best airline
bengalibadass (9 months ago)
Damn, the aviation industry is full of crooks.
Bezawada Harikrishna (9 months ago)
Very much helpful Thank you very much
Nathan Matthews (9 months ago)
They work out a fair priced deal based on flight length, departure and arrival locations and inclusions/class in the flight. Then.....they times by 3 and presto. Thats how they do it
Dennis Pietrandrea (15 days ago)
No actually, airlines will charge more to people that have more money. Which they determine based on data they collect on you. It's a BS practice and can be seen by loading up the same flight. One in your normal browser and one in incognito mode. You will see two different prices for the same flight, same time, same ticket and etc.
Perfect Time (9 months ago)
Hi CNBC, can you make a video on business model of sellanycar.com , its a Dubai based largest car buying company.
Guillaume cds (9 months ago)
So handsome
bobby junk (9 months ago)
quality content as always !!
deviprasad raju vysyaraju (9 months ago)
Additional charges are more than the base fare for deomestic airlines
JENNYk (9 months ago)
I use hooper on my bookings! It’s worked out great so far
Zhixiong Li (9 months ago)
such an instructive video showing how air ticket prices are formed. Learnd another meaningful knowledge today, as well!
Salah Alkhalifa (9 months ago)
Nice topic
Abhilash Nair (9 months ago)
A very unexpected video but really great!! Loved it... 🙂 Usually companies block such videos for India but not this time. Thanks for that. 😁
Tisha Kapoor (9 months ago)
Make a video on why aviation industry is in losses.
Prashant Thakur (9 months ago)
Nicely explained 👏
Hee Sing Sia (9 months ago)
What? Here I thought they just pulled the numbers out of their arse.
Stop Israel's Genocide (9 months ago)
If you fly inside America you have to put up with incompetent underpaid employees, stinky planes never on time and TSA harassment. We should all boycott this industry for at least a year.
Roman Zolanski (9 months ago)
Wendover Productions CNBC is coming for your brand.
Gnolls (6 months ago)
Wendover Productions' video on this and their videos in general are much better at explanations.
Abhilash Nair (9 months ago)
Roman Zolanski lol. 😂😂😂 Add Skillshare and Brilliant and there you have it...
Dzikri Pratama (9 months ago)
So it's the AI (again) ....
Lang Aw (9 months ago)
bullshit Mega Mix
Arnab Bera (9 months ago)
Hi CNBC, can you make a video exclusively on low cost airlines business model, it's impact on travel and tourism industry? Thanks.
lolbrunopt (9 months ago)
Check "Wendover Productions"
CNBC International (9 months ago)
Great idea. We'll add it to our list.
Trong Huoa (9 months ago)
3:31 Why London to Bali? Not Pattaya or Nha Trang
Anak Rajin (9 months ago)
Trong Huoa why not?
Bidish Das (9 months ago)
How do CNBC international edit their videos? Which software do they use?
Frank maxwell (8 months ago)
Nice !!
lafkdjay (9 months ago)
MS Paint.
Bidish Das (9 months ago)
CNBC International Thank you so much for your reply. It was very helpful for me!
CNBC International (9 months ago)
Hey Bidish. We use Adobe Premiere for editing and After Effects to make our graphics.
Nived Warge (9 months ago)
Can you make video on, what will happen if your country doesn't pay the debt or what happens when a country goes bankrupt? Please
Duygu ALTINOK (5 months ago)
Nothing happens. Going bankrupt is very difficult. IMF or EU gives some money.
Sophie Howarth K (6 months ago)
more videos will be created and upload to help those bankrupted countries through out their tough time...I guess. lol.
Hahn Selativ (7 months ago)
CHINA will buy your Country with Fake Money!!!
Arnab Bera (9 months ago)
lolbrunopt Actually nothing happens. Eventually, IMF helps in bailing out these countries provided that they adhere to terms and conditions dictated by IMF. Some countries like Thailand manage to recover strongly after bailout and eventually pay back their dues while there's the Greek example, which keeps on defaulting, despite repeated bailouts and end up deeper and deeper into debt.
Siddharth Kumar (9 months ago)
Nothing happens . Get up and kick start the country again..
Adam Nazifi (9 months ago)
Wow, i learned so much from this
Hela Asgard (6 months ago)
Watch "Do you trust this computer" guys, this is just the tip of the iceberg. Booking flights from your phones is the worst idea
Hela Asgard (6 months ago)
Not enough as they don't tell you how to avoid being ripped off....😕
CNBC International (9 months ago)
Love hearing this!
Ryan Chen (9 months ago)
airlines are scammes
The man himself (9 months ago)
Book in advance to avoid last minute drama
Atem S. (9 months ago)
I taught the air-fuel price would affect the price more...
Atem S. (3 months ago)
+Teddy Lumidi what does Hitler has to do with this??? The price of fuel fluctuate and therefore fueling the plane will not cost the same! Companies like to pass prices affectation to customers, I taught it was the same thing! Why do you think you pay so much for everything when it cost barely nothing to make!
Teddy Lumidi (3 months ago)
+Atem S. dude history didn't start with hitler, btw where did you teach that fuel affects tickets? which class?
Rafael Henck (7 months ago)
Cost is cost. Price is price. Treat them equally and you'll ruin a business. Some products will bring loss, others 10% profit and others 200% profit. Saying "Cost is price" is simply being a business amateur.
Atem S. (7 months ago)
Cost is price!!!! The more it costs to make this flight, the higher the price! You gonna tell me a flight that takes 200K is fuel will cost 199$?
Rafael Henck (7 months ago)
This affects costs, not price. Both are managed separately by airlines and smart companies in general
Guna Guna (9 months ago)
Nice video
Shawn Afshar (9 months ago)
Too damn expensive
Zenix TO - Test (9 months ago)
Shawn Afshar yeah
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Stop Israel's Genocide (9 months ago)
USA-SA-SS.
Zenix TO - Test (9 months ago)
I will fly an airplane
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I will fly a plane soon
Zenix TO - Test (9 months ago)
Most comments are mine