HOW DOES AIRLINE TICKET FARE INCREASE AS YOUR DAY OF TRAVEL COMES CLOSER?
While booking a flight ticket, it’s likely that you spend hours on the internet to figure out the best deal. Fares appear to fluctuate as the date of travel comes closer.
LET’S FIND OUT!
Well, how do you think these prices keep on changing?
The airline companies use Machine Learning to build a dynamic pricing model.
Dynamic pricing is a technique of pricing a product based on the current demand and market conditions.
HOW IT WORKS?
Modern dynamic pricing solutions use the latest technologies and algorithms to generate real-time dynamic prices to estimate market demand more accurately.
WHY IT'S DONE?
By using dynamic pricing, profit of the airlines increase by up to 7%. To earn more profit, airline companies sell the maximum number of seats for the highest possible price.
FACTORS INFLUENCING AIR TICKET PRICE
Dynamic pricing of the airfare depends on many factors including demand, type of customer, date of travel and carrier service.
BENEFITS OF DYNAMIC PRICING
Analyzing the huge amount of data is impossible for humans. This is where the Machine Learning algorithm comes into play and helps airline companies in maximizing their profit.
OTHER APPLICATIONS OF DYNAMIC PRICING
It is valuable for products like hotel booking, tatkal train booking, etc.
Some of the famous companies using dynamic pricing other than airlines are:
Dynamic pricing is just a single application of Machine Learning. There are more such wonders that can be accomplished with its help.
Learn about them.