Did you know that airlines charge different customers different prices for the same flights? In this post, I focus on some of the arbitrage opportunities this opens up.
Different countries, different prices
Ever since deregulation, airplane tickets have been priced dynamically using a variety of factors such as distance traveled, fare class, demand, fuel prices, taxes and local laws. The time at which the ticket is purchased, in relation to the flight, is also an important factor. Dynamic pricing has not only helped airlines maximize their revenue per seat but also their overall load factors.
Two such factors that have recently caught my attention are the sales country and the currency.
In short, airlines typically have different strategies for each of the countries they operate in and this is reflected in the prices of their tickets. For example, a one-way flight from country A to country B may not be priced the same in both countries even though it is technically the same flight. It may be priced at 150 EUR on the local country A site to attract leisure travelers and at 250 EUR on the local country B site to attract business travelers.
Example one: Norwegian DI7408 (SIN to LGW, 12/02/2018)
Norwegian is infamous for their use of dynamic pricing and this flight is a perfect example of why. At first glance, you will notice that the number is the same on both the local Singapore and local UK websites (149.90). The difference is the currency it is priced in (SGD vs GBP).
Taking that into account, the real ticket price on the local Singapore site is nearly half that of the local UK site. Remember that this is for the same flight, same seat.
Example two: WOW Air WW214 (YYZ to KEF, 14/03/2018)
Unlike in the first example where the airline is trying to fool potential customers into thinking that the price is the same on both sites, this example illustrates how WOW Air hedge themselves against currency fluctuations by charging higher prices on each of their local sites. The price on the local Canadian site is 159.99 CAD while it is 139.99 USD (174 CAD) on the local US site, 105.99 GBP (178 CAD) on the local UK site, 115.99 EUR (173 CAD) on the local French site and 1159 SEK (176 CAD) on the local Swedish site. The difference may not seem as dramatic as in the first example but it can still add up over time for those who fly frequently.
I could go on and on listing more examples, because nearly all airlines engage in this strategy. This brings me to my next point, how to beat them at their own game.
How to take advantage
An easy solution is to manually search on every local site operated by an airline, using a web browser in incognito mode and a currency conversion tool like XE. I understand that this solution can be time-consuming (especially if the airline has many local sites) but there is, unfortunately, no automated tool that I know of that can be used to automate this process.
In some cases, you may be able to save some time by using the ITA matrix to perform the search. Simply play around with the currency and sales city in the search form.
Other travel hacks
I recommend reading my Ultimate guide to travel hacking to learn about more ways to save money on flights, hotels and a lot more.