WHY FLIGHT CHARGES CHANGE EVERY DAY?

Airfare is a product,but it has far more pricing variable than most.Unlike the products like Television and other gadgets  which only have less prices and discounts during festive seasons,but airfare do change due to many reasons like Fuel cost,Flight Distance,Competition,timing of flight and even time of purchase.

Fuel Cost

Fuel cost becomes the major contributor of the airfare because fuel cost change everyday single day.From 2011 fuel cost became the number 1 operating expense as it increased from 20 to 40%.

Hence change in oil prices impact on the operating cost for airliners which in turn make them reconsider how much to charge per ticket in order cover their costs and make profit out of it. 

Flight Distance

Well this is one of the major problem as farther you fly the more expensive your ticket will be.

when the distance of the flight is more it requires more Fuel, again fuel cost comes in to account here.

Competition 

Airlines have to consider their competition on each route they operate.if there is an airline operating the same route but charging comparatively less per ticket, then the airline will have to consider reducing their fares or risk not being able to sell enough tickets to cover the costs. They also have to be conscious that they are not charging so low that they are unable to break even.  

Even time of Purchase

When you buy, your ticket matters.If you buy at the last minute typically within a week before departure, as business travelers do you'll pay a hefty premium which is why airline love their road warriors. The best time to buy domestic tickets is between three months to two or three weeks before departure.The best day to buy is Tuesday starting at about 3 p.m, at this time airfare sales have been released and competing airlines have matched the new,lower prices.  

HOW DOES THE FLIGHT CHARGE CHANGE

Airline try to maximize revenue per Flight.This means that, they charge more or less depending upon the time where the predict to maximize the total revenue including all costs.They call it "Revenue Management" or "Yield management".The airline product is very weird the thing they are selling comes in weird quantities and has a short time limit. For example an airliner is flying Airbus A320 from one place to other, that the aircraft has 150 seats.If the airliner sells only 140 seats, the remaining 10 seats perish after departure time and they cant like return those seats to the manufacturer hence they have a 50 seat plane ,150 seat plane and 200 seat plane so that they can have much control over their product.