The ideal market has a good mix of business and leisure travelers. In fact, the business travel market can determine where an airline flies, and how often. Las Vegas and Orlando, the nation's top two tourist destinations, have each seen a recent decrease in the number of airline seats flying into and out of their airports. Daytona Beach was served by five major airlines until Martin Marietta pulled out of the area in 1990, taking its business travel with it. Now only two airlines remain.
Airlines start by estimating the cost of each flight.
They do this by tallying direct operating costs, such as crew salaries, maintenance, insurance, the aircraft, and fuel, and indirect costs, such as advertising, the reservation system, and travel agency commissions. Starting 11 months from a flight's departure date, a certain number of seats are allocated at each price, and as departure draws nearer, they're moved from one bucket to another, depending on how well the flight is selling. Overbooking balances seats left empty due to cancellations and no shows versus passengers turned away if too many tickets are sold. The goal is to fill it at the last possible minute. If it's filling too quickly, you cut back availability of leisure seats.