Airlines Could Soon Start Charging Different Fares for Different People

As dynamic pricing schemes with ever-improved algorithms come into play, published airfares could soon be tailored to an individual passenger’s travel habits and willingness to pay.

Commercial airlines already know a lot about their passengers. The likelihood is high that each carrier knows the travel habits and basics demographics of the frequent flyers and the infrequent leisure travelers alike on each and every flight on their schedules.

Now, it seems the airline industry is intent on using that information to decide exactly what sort of an airfare to offer individual air travelers. According to recent reports in the media, airlines are closer than ever to tailoring fares to each traveler based on travel habits, brand loyalty, demographic information and, perhaps most importantly, their willingness to pay the asked-for price.

“2018 will be a very phenomenal year in terms of traction,” John McBride of the e-commerce consulting firm PROS told Travel Weekly. “Based on our backlog of projects, there will be a handful of large carriers that move toward dynamic pricing science.”

McBride’s firm is already working with major airlines around the globe including Etihad, Air India and Air China to help carriers to set optimum fares in real-time. According to PROS, factors including “customer buying behaviors” are used to “accelerate sales results through dynamic pricing across different passenger types including groups and corporate sales.”

Meanwhile, Amadeus IT Group unveiled a revamped New Distribution Capability (NDC-X) system this week which it says will revolutionize the way airlines sell and price tickets. The NDC-X system, which was designed in conjunction with the The International Air Transport Association (IATA), will allow airlines, travel agents and booking sites to use data to tailor airfares in ways that were inconceivable only a few years ago.

“NDC holds great potential for the travel industry, and is part of a bigger picture of digitalization as airlines and travel sellers are testing new ways to adapt their businesses and improve services provided to the traveler,” Amadeus VP Julia Sattel explained in a statement announcing the public launch of NDC. “At Amadeus we are working hard to solve our airline customers’ technology challenges in areas such as merchandizing, dynamic pricing and cloud servicing, which we see as the heavy machinery in the background which will make NDC and improved retailing a reality.”

According to the Charlotte Observer, these new dynamic pricing technologies could amount to a sort of “surge pricing” for some air travelers. For example passengers using a corporate credit card could see only airfares that are priced substantially higher than those presented to a first time flyer.

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