How do airlines figure out how much they should charge the prices on tickets to customers?

is there any equations involved?How do airlines figure out how much they should charge the prices on tickets to customers?
There's a whole bunch of factors that goes into determining the price of an airline ticket:





1.) Competition: If there are multiple carriers running a market, they are all usually in the same general ballpark in means of pricing.





2.) Economic Factors: Things such as fuel. When jet fuel is really expensive as it was in 2008, then the all of the airlines will increase their air fares to compensate for the extra cost in the fuel.





3.) Load Factor: This is the single greatest factor in pricing. The load factor is the percentage of how many seats are filled with revenue customers on a given flight. The key here is to get the perfect load factor. Sure you may think that having a sold out flight is the best method, but not always. With all the extra people, comes extra weight. So airlines are tricky here. They will price their air fares a bit more expensive to ensure that the plane is only filled up to a certain capacity, maybe 70-80% They may figure that this percentage gives the best optimum fuel range on the plane and the plane can still make money on the flight.





Gone are the days of just selling cheap fares to fill the seats. That isn't making money. When it comes to the yield, or the profit they actually made off the flight, they need higher air fares. Are there formulas? Yes, and they are really complicated. I would recommend reading this book:





http://books.google.com/books?id=UPLnchd鈥?/a>





It was written by Richard Zeni. He currently works for JetBlue Airways and is lieterally the ';pioneer'; in the way that air fares are calculated today. He used to work for US Airways and he was the behind the scenes crusader in bringing them out of the hole with better revenue management. The book online is a sample, but there's more than enough stuff in there to give you the big picture.How do airlines figure out how much they should charge the prices on tickets to customers?
There are LOTS of equations involved.