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Using WebJet travel for looking at return flights between Sydney and Brisbane, I noticed that even when I looked as far ahead as possible (Saturday 16 September to Sunday 17 September, approximately 11 months in the future), the cheapest flight from Brisbane back to Sydney was a Virgin Australia flight at 7 AM at $99, approximately $50 cheaper than other Virgin Australia "Getaway" return flights from Brisbane to Sydney.

Is this because some tickets have already been sold for other times in the day, driving those prices up, or do airlines have a lower initial price for some slots compared to others?

I had a brief look at How do airlines determine ticket prices? but it didn't seem to answer this.

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    Your question is: "Do airlines have a lower/higher initial price for some slots compared to others?" The answer is "yes, that is absolutely true."
    – Fattie
    Nov 5, 2016 at 11:29

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do airlines have a lower initial price for some slots compared to others?

Yes. It is unlikely to be just coincidence that the cheapest you found was an 07:00 departure. 45 minutes is recommended for bag drop off, so arrival should be by 06:15 - say 06:00 to allow a little margin of safety.

Then consider some travellers may have a long distance to get to the airport. They might need to depart home at 04:00 or 05:00. But at those times there may be no practical public transport options. Maybe a taxi is viable but a lot more expensive.

And it might mean rising nearer 03:00, even staying up overnight (and suffering later for doing so), or risking alarms that do not go off, or moving near to the airport the evening before and staying in a local hotel (more cost).

Compare that with say an ETD of noon and it is a lot more hassle and possibly expense. So noon is more popular, so passengers are prepared to pay more for noon than 07:00, so airlines charge more for noon than 07:00.

The flight is quite short duration (~1-1/2 hr) so an 07:00 take off should give a full day in Sydney on arrival. But it is ~1,000 km and for most business people probably justifies eating into some of the working day (not that the weekend is!). "Sorry, I can't make a 10am meeting, make it 11:30" is probably easy to accept coming from someone having to travel that distance (on a flight at a more civilized hour).

Your example is however a weekend, which is a special case. From Sunday afternoon onwards one can expect much higher numbers to want to travel to Sydney than on a Sunday morning. That is, business travellers based in Brisbane preparing to work the Monday in Sydney (who do not want to give up too much of their weekend in Brisbane to do so) and leisure travellers having to return home to Sydney (who do not want to cut short the amount of time they spend visiting Brisbane – nice place!).

I've almost convinced myself that nobody would want to travel at 07:00 on a Sunday :)

It is not that strange – times of peak demand can lead to higher prices then for public transport, telephone services, electricity, oil, theatre tickets, drink and goodness knows what else.

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    Perhaps I would turn the end upside down: the only way to get people on inconvenient flights is by pricing them low. It's not that passengers are "prepared" to pay anything, I think. On the other hand, there are always people (typically young) who want to start very early so they can tourist for longer time especially if they only have 1-2 days at the destination.
    – user4188
    Nov 5, 2016 at 2:11
  • I'm almost convinced that nobody would want to travel at 07:00 on a Sunday out of Stansted...
    – Michael Hampton
    Nov 5, 2016 at 2:29
  • @chx I actually do take the earliest flights, and it gives me more time to explore the city I am visiting.
    – Patrick
    Nov 5, 2016 at 5:56
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    This is also a way to do price discrimination. There are apparently some customers who are only willing to take trip flight if its £30 cheaper. You want their money (assuming you can still charge enough between the fare and ancillary revenue to cover marginal costs), but don't want to reduce the price for customers willing to pay more. So you offer the cheaper fare only for people booking at inconvenient times, or taking weird connections, or otherwise subjecting themselves to more pain to save a little cash, in the hope of better aligning your prices with consumer willingness to pay.
    – Zach Lipton
    Nov 5, 2016 at 6:11
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    @Tom I was using the term in the economic sense of "attempt to charge people different amounts for similar products or services based on their willingness to pay," not the "unfair" or prejudicial sense. It's a word that is commonly applied to airline pricing strategies.
    – Zach Lipton
    Nov 5, 2016 at 19:13

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