How Airlines Might Gouge You in the Future: Personalized Pricing

[joeybee12]

Imagine a time in the distant future when you and two of your friends are invited to a wedding in Myrtle Beach, S.C. You log on to your frequent flier account with AnyJet Airlines, and seeing that you have a Greenwich, Conn., zip code, the airline assumes that you’re wealthy and charges you $398 for your fare (unfortunately, despite your tony zip code, you’re actually a modestly paid schoolteacher). At the same time, your friend and fellow wedding invitee who lives in a nearby, less-affluent zip code is also booking the same flight to the same wedding; she’s quoted a lower fare of $310. And when the third member of your trio logs on to purchase his ticket, the airline sees that he’s a frequent business traveler who’s already taken 15 flights this year. It assumes that he’s an easy sale and socks him with a $410 fare.

Welcome to the world of “personalized airfares” or “personalized pricing,” whereby the amount you pay for a flight is no longer just a number based on impersonal factors such as when and where you’re flying or when you booked your ticket. In this possible future, your airfare could be based on who you are, and each fare would be different for everyone — even people booking the same flight at the same time.


You may not have to imagine that scenario for much longer; some airline industry insiders believe that personalized airfares are coming. Last week at the annual meeting of the International Air Transport Association (IATA, an airline industry lobbying group), one Spanish airline executive reportedly said it was inevitable that airlines would soon start using personal data to charge some passengers more than others. And while no major air carriers have yet announced such pricing changes, more than a few experts think it’s only a matter of time.

“Absolutely” is Airways News senior analyst Vinay Bhaskara’s answer when asked if personalized pricing is inevitable. “This is something that will enable airlines to increase their revenue.” (At that aforementioned IATA meeting, airlines also announced that they had increased their 2015 profit projection to $29.3 billion, which would be a nice boost from last year’s $19.9 billion profit.)


Would personalized pricing be just another money grab for airlines? Or could it actually be good for air passengers? Experts aren’t exactly optimistic. “I don’t really see the benefits to the consumer,” says travel columnist and author Christopher Elliott. Bhaskara agrees: “At the end of the day, on an aggregate level, airline customers are going to be worse off.”


https://www.yahoo.com/travel/how-airlines-might-gouge-you-in-the-future-121613697017.html

[Lifelong Protester]

1. I'm just guessing, nothing the airline industry

does, when it comes to pricing, will be good for the average customer.

[joeybee12]

3. Bingo

One more way to screw the consumer.

[Blue_Tires]

2. Fliers will still try to shop for lower fares online

since every airline won't be able to use the same exact model without it being collusion...

I also don't know how the FF and corporate accounts will fit in this scheme

[geek tragedy]

7. yeah, don't see how this would work without violating several laws.

Also pretty simple to evade--just don't log into your frequent flier account and/or don't book directly on airline websites. Just use Kayak

[silverweb]

4. This ought to be illegal.

[font color="navy" face="Verdana"]It's wrong in every respect.

[leveymg]

5. Sounds vaguely socialistic like the hospital stay business model.

But, as we all should know by now, the US airline industry wouldn't exist if it weren't for billions of dollars in direct and indirect taxpayer subsidies every year. Most people who fly are upper-income, so it also indirectly subsidizes them, as well, and transfers incomes upwards.

Kinda hard to be outraged, given the inequitous status quo.

[geek tragedy]

6. Kayak, Orbitz, Google etc have already precluded that.

Moreover, what dunce would log onto their frequent flier account before pricing out airfares then?

Also, if you and your friends are traveling together, just book them under one reservation.

Airlines are going to charge as much as they can for each ticket, regardless of the purchasing power of the customer. If the customer doesn't like the price, they'll go to another airline.

This seems like a lot of hot air.

[Auggie]

8. Wouldn't it be easier to just raise all fares by $10.00?

[joeybee12]

9. I think they wouldn't make enough money that way...

Charge one person $400, the other $300...they can really make more money this way, which is what it's about. And since it's all automatic...

[Auggie]

11. Air travel is just incredibly broken ... thank you capitalism (*sigh*)

I hate flying.

[KamaAina]

10. Use a mail drop address in the nearest demographically dead zipcode

in the Greenwich example, nearby South Norwalk's 06854 might work.

[joeybee12]

12. I wonder how they verify you're being honest...

do they just check your IP...do they ask for your billing address before they quote the price?

[DFW]

13. If this happens

I am renting a series of P.O. Boxes in various parts of rural Mississippi just to book my domestic flights.

Over here, Air France and Air Berlin, the carriers I use most often, have open sites where their fares can be booked by anyone. You don't give your ID until you have locked in the flights AND the fares. The fares are set by how close to departure you are and whether or not the flight is filling fast due to demand. Who or where you are isn't a factor (yet, anyway).

[msongs]

14. available seats already rise in $$ as the plane gets full. last minute seats for a big

premium over what it would have cost weeks ago. thanks, computers.

[kentauros]

15. And I foresee an increase in the use of fake IDs,

with addresses in the poorest parts of your area. Hell, even set it up for some county in the middle of the desert, Pop. 10, and see what happens

[BlueJazz]

16. Doesn't bother me but it's still a rotten thing to do.