4 Expert Tips to Pay 40% Less during Your Next Holiday

Ways to save money that I learned during my career with global airlines

Levi Borba

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Image by Pixabay

The airline industry is by far the sector with the most refined mechanisms for pricing and customer segmentation.

Companies in this market use advanced statistical tools to determine the willingness to pay from the passengers and which extras (also called ancillaries) have the best return.

Therefore, the fact that on some flights you need to pay for a glass of water and in others you have wine for “free” is probably a result of mathematical models — the precision of these models is open for debate.

Some of the greatest airlines on the planet (including the one that I worked for) sponsor a research consortium in the MIT (Massachusetts Institute of Technology). There, they develop the advanced science behind their practices. Everything aimed to help airlines survive in a hyper-competitive market while remaining profitable.

But if you — the passenger — understand their methods, you can pay less for your next flight.

Much less.

Or at least have some nice perks.

4 of these hacks are below, and many others you can find in my book Budget Travelers, Digital Nomads & Expats: The Ultimate Guide.

Before starting, a quick but necessary context from the science behind airline prices, or Revenue Management.

What Does Revenue Management Mean?

Revenue Management (RM) is a set of techniques where historical data are the input on equations to forecast consumer behavior. Based on those forecasts, RM optimizes product availability and price with the ultimate goal of maximizing revenue.

TL;DR: smaller prices when the demand is low, bigger prices when the demand is high (it is not always like that, but this is a good simplification).

Revenue Management is the reason that flight prices change so frequently. How each company applies this science can be the difference between bankruptcy and profitability.

During the last forty years, RM soared in popularity among airlines. It was a matter…

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