In the year 2024, fluctuations in airfare have caught widespread social attention, surpassing the ups and downs of the stock market, and becoming a hot news topic. Since last year’s National Day, the “tricks” in the pricing strategies of airlines have gradually been discerned by the public. As the May Day holiday approaches, a group of young workers adept at understanding airfare trends have exclaimed on social media platforms like Xiaohongshu about a new round of price reductions.
Residents from the Chongqing area expressed extreme dissatisfaction, stating that the round-trip airfares for their planned holidays, booked half a month in advance and originally costing thousands of yuan, were reduced by almost half closer to the holiday. Consumers in the Zhejiang region also had the same experience, with airfares dropping sharply from 6300 yuan to 4000 yuan. This sparked heartache among consumers in the Guangdong region, who were discontent with this marketing tactic of first raising prices and then lowering them.
According to air ticket data monitoring by Feichangzhun, the average price for domestic economy class airfare during the May Day holiday is 852 yuan (excluding taxes), a year-on-year decrease of 1.13%, and a drop of 22% compared to the previous period. Data from travel platforms like Trip.com indicates that during the May Day holiday, ticket prices for many popular routes did not rise but still offer low-cost opportunities, such as Shanghai to Urumqi from 690 yuan, Shanghai to Beijing from 460 yuan, and Guangzhou to Beijing from 530 yuan.
After the experience of ticket refunds during last year’s Golden Week in November, the workforce of this edition has learned how to navigate the airfare market with ease. When airlines implement price reductions on non-popular routes during the holiday period, savvy consumers no longer tolerate it and instead begin to engage in an intellectual contest with the airlines. Some users on social media suggest that if ticket prices decrease and allow no-fault cancellations, then canceling and rebooking is a good way to save costs. However, some airlines have set terms and conditions for ticket changes and cancellations during the May Day holiday.
Confronted with non-refundable tickets, some bold consumers have shared their refund tactics:
- If the airfare drops significantly, do not rush to refund, but instead contact the airline’s customer service first.
- Capital Airlines: After calling, customer service will record the situation and request an ID photo, then allow booking a cheaper ticket on the same flight at the same time, refunding the high-priced ticket after the trip.
- Hebei Airlines: Also through phone contact, customer service will record the situation, allowing a direct refund request for the difference post-trip.
- China Eastern Airlines: In the face of some poor customer service attitudes, consumers recommend trying to contact multiple times, as there are successful cases.
- China Southern Airlines: Refuses to assist, with a poor attitude.
- Hainan Airlines, Sichuan Airlines, Shenzhen Airlines, Juneyao Airlines: There are generally no successful cases reported in the current comment sections.
For those airlines that refuse refunds or changes, some workers choose to face the challenge directly. They take the fare difference to the online travel platform for complaints, then escalate the issue to the airline, and if unresolved, they report it to the Civil Aviation Administration. During this process, they advise having a clear train of thought when making calls, and some netizens even mentioned using A4 paper to write a complete complaint framework.
In the end, she successfully reclaimed the excess amount already spent on airline tickets. During an endeavor where the public pooled their wisdom, each tackling their respective challenges, they collectively sought out experience and engaged in an exciting game with online travel services and airlines.
Many question whether it is fair for passengers to insist on ticket refunds after fully understanding the cancellation policies. This topic has sparked lively discussions on social media platforms, questioning why train ticket prices are constant while air fares fluctuate significantly.
In reality, each airplane seat is physically the same, but due to longstanding international practices, different ticket usage conditions such as refund and change policies, the number of days stayed, and timing of booking contribute to different ticket prices. On the other hand, airlines tend to set lower prices with more restrictions, requiring customers to book earlier, as part of a strategy to implement reasonable “price discrimination.”
For example, in addition to cabin class divisions like first, business, and economy class, timing is also a critical dimension for airlines in assessing supply and demand. Business travelers often book within a week of their trip and are more willing to pay higher fares. Conversely, those seeking leisure travel usually plan their trips earlier and are more sensitive to ticket prices.
Thus, allowing price-sensitive consumers to book cheaper tickets in advance while enabling time-sensitive consumers to still purchase tickets at the last minute (albeit at a higher price), was a common practice for airlines before the pandemic. During holiday seasons, the rule of “early buyers pay less, last-minute buyers pay more” has become an unspoken consensus among the masses.
However, compared to the outspoken rights defense after house price drops or the heated debate caused by Tesla’s price cuts, any slight fluctuation in airline ticket prices is closely watched by the working public today. Moreover, since the COVID-19 outbreak in 2020, China’s air transportation industry has lost stable passenger traffic. The rise of “reverse tourism” and “county tourism” has also drawn the attention of young people to new travel destinations beyond traditional holidays, significantly impacting airline’s pricing and marketing strategies.
Nowadays, mainstream airlines typically employ two systems to jointly devise their pricing strategies. First, airlines use fare management systems to set different prices for various cabin classes at different times based on cost and passenger flow. Then, combined with revenue management systems, they decide on the quotas for different discount cabins and forecast total aircraft revenue.
For instance, during this year’s May Day holiday, the price of a flight from Zhuhai to Kunming in early December last year was as high as 3080 yuan. The original price remained for less than a month before it began to decrease, eventually falling to just 700 yuan two weeks before departure. This phenomenon is not unique and similar price reductions have been observed on other routes, with actual supply and demand playing a decisive role. Algorithms may be sophisticated, but the unpredictable nature of the post-pandemic era has led to increasingly violent fluctuations in ticket prices, with temporary price reductions on flights becoming more common since last year’s National Day, persisting into this year’s May Day holiday.
Yet, ordinary consumers find it difficult to understand the complex mechanisms behind ticket price fluctuations, and the “secrets” of pricing can easily lead to misunderstandings and complaints.
As flight ticket prices fluctuate frequently, the public’s sensitivity to airfare volatility has increasingly risen, probably because the original price of flight tickets is not within the average person’s daily budget. Passengers who purchase full-price tickets feel disappointed and upset when they discover they could get a better deal by purchasing later. This gap between expectation and reality leads to incessant complaints about airfares before holidays.
From the airlines’ perspective, Robert Crandall — a former senior vice president of marketing at American Airlines — once pointed out that for any given flight, most costs like fuel, airplane maintenance, and staff salaries are fixed. The marginal cost of adding one more passenger is essentially just providing an in-flight meal. For this reason, he believed that as long as the sold tickets could cover the fixed costs of the flight, regardless of the ticket price, any remaining seats should be sold if possible.
This cost management strategy is not problematic in itself, but for years, the revenue departments of airlines have relied on fare management systems that, although seemingly scientific, have overlooked the changes in passenger psychology and human nature in the post-pandemic era. If a large number of passengers find out about a “buy high, refund the difference” situation, it will lead to both a drain on customer service human resources and unpredictable revenues because of the cold algorithimic “price reduction analysis.”
Early dynamic pricing for flight tickets was dependent on human decisions, setting prices based on experience. However, in today’s context where historical data is no longer reliable, and China’s civil aviation situation has greatly changed, it may be more reasonable to establish preliminary pricing through “human intervention” or AI big data. It is worth mentioning that services like Google Flights promise to pay passengers the difference in ticket prices, which has increased the transparency of pricing strategies.
At the beginning of the year, Air China announced via its official Weibo that it would distribute two vouchers that allow for ticket refunds without any reason for each user registered through the mobile app, valid for one year. Tickets for designated domestic routes purchased through the Air China App can use these vouchers when processing refunds via the app, which not only increases direct sales but also provides more flexibility for passengers worried about overpaying.
Furthermore, other domestic airlines have started to gradually adopt international practices. For example, China Southern Airlines and China Eastern Airlines announced at the beginning of the year that if ticket prices drop after purchase, passengers can repurchase tickets within 24 hours after the original purchase, and under certain conditions, the original tickets can be refunded free of charge. This policy is similar to the policy of American airlines that offer a full refund within 24 hours. Nevertheless, some of the strategies for ticket refunds shared online do not necessarily conform to the airlines’ refund policies.
In the future, balancing operational costs with passenger rights is undoubtedly a challenge that airlines need to continue exploring.
