Take the example of air travel..
If u are booking before a month from your day of travel, say, from chennai to delhi, it is 4500 approx.
if u are booking in less than a month, it somewhere hovers from 6000-8500.
If u are booking before two days, it will be 9500.
If...
more... you are booking on the spot on the day of travel, it will be 9500-10000.
This is called as Dynamic Pricing. It depends on the demand on that particular day.
Lean days are the week days, Demanding days are the weekends.
during festival days, say, diwali, the price can shoot upto 12000-15000 rupees even.
So, Dynamic pricing will help IR to get some reasonable profits, since the price structure would obviously be above the current fare between any particular routes.
Hope I cleared to some extent Ji!