Once upon a time airline ticket prices were based purely on demand.
Then, the internet happened – and the way commercial carriers calculated their fares became infinitely more complex with cookies and account details.
Now, according to aviation experts, that looks set to continue with another tactic called ‘dynamic pricing’, based on wealth.
This sees technology monitor a customer’s profile, including their solvency, and then tailor fees accordingly – meaning moneyed flyers are charged more per journey simply because they can afford it.
Conversely, those on tighter budgets are offered the same flight for a cheaper price based on their own finances.
According to John McBride, director of U.S-based revenue management software provider PROS, which works with various airlines, a number of operators have already introduced dynamic pricing on some ticket searches.
He told Travel Weekly: ‘Our customers have definitely seen increased conversion rates of up to 50 per cent, and it has enabled airlines to achieve incremental revenue in the seven per cent to 10 per cent range. Dynamic pricing clearly speaks to the opportunity for airlines to service a wider range of customers with a broader set of fares.’
He added: ‘Based on our backlogs of projects, there will be a handful of large carriers that move toward dynamic pricing in 2018.’
Some major carriers are said to use ATPCO (the Airline Tariff Publishing Company), which helps ‘monitor competitor fare products… to build [their] pricing strategy’.
ATPCO published a report in 2015 which suggested airline prices would eventually be determined by ‘who is asking’, rather than simple demand – so the writing was on the wall.
However, while it may offer some benefits, critics believe the use of personal data to structure pricing is questionable.
Emma Coulthurst, travel commentator for holiday price comparison site TravelSupermarket, told MailOnline Travel: ‘The current practice, which consumers are familiar with, is that everyone is offered the same price at the same time for a seat on a plane, based on how full or empty a flight is – a fair and equitable way of doing things.
‘But it is not clear how much airlines are using or planning to use ever-more sophisticated online tools in future, based on your IP address, to find out what you’re likely to pay – and then charging you accordingly.
‘It seems intrinsically unfair that companies should be allowed to do this. It would mean that one of your friends could be looking at exactly the same flight at exactly the same time but be being offered a different price to yourself. It feels discriminatory to be targeting people based on a profile of what the company thinks you can and are prepared to pay.
‘It would be great if a governing body such as the CAA [Civil Aviation Authority] could look at dynamic pricing and see which if any airlines are currently doing this and which of them are planning to use and apply this technique. If so, can the airlines be made to be transparent about it – or even stopped from doing it completely?
‘Also, pressure needs to be put on the UK Government and the EU (when rules there will still apply) to intervene and set out guidelines or law changes to protect customers. The EU intervened on credit charges, recently. What laws can be put in place to protect consumers against dynamic pricing?’