Q. How do the airlines set their prices? After seeing airfare for a particular schedule jump 100% from the time I started my search to when I actually tried to book it 3 minutes later, I was given the old "supply and demand...someone somewhere must have booked a seat in that span, and that caused the jump." How is that legal or possible?
A. We've heard this story time and again. Airlines only sell a certain small number of seats at their lowest fares. A flight might have a dozen different economy class fares, with a certain number of seats available at each fare. The price of each fare class can be set throughout the day, plus the airlines employ dozens of airfare analysts who do nothing all day but adjust the number of seats available in each fare class. That's why it's so important to check fares many times throughout the day and over a number of days if you can't find what you believe to be a reasonable fare. A fare might be $300 one minute, and the next it could be $200. Since airlines were deregulated in 1978, they are free to set whatever prices they wish.