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Old Feb 25, 19, 5:39 pm
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mikalee
 
Join Date: May 2003
Programs: QF WP
Posts: 960
Searches trigger Price Surges in AU

I think we all know that one of the general principles of airline yield management is the last seats on a particular flight generally sell for the highest cost (ignoring class of service).

I only had the conversation the other day about whether constant searching of similar flights for say a city pair within a date range from a device/s from the same network was being analysed by the airline and I might get different pricing to someone else searching from another IP (in the same market). I imagine the technology exists for manipulative pricing but I have not seen it deployed or heard of the allegation.

However a more watered down version of this exists and has been admitted to. From the Senate Regional Airfares Inquiry it has been revealed that pricing of flights will jump based on number of searches by potential purchasers. I am not sure if this community are aware of this.

North West Star
... an example last year of a Townsville to Cloncurry flight which jumped from around $600 to $1200 when the Flinders Hwy was closed.

Virgin CEO Rob Sharp said he was aware of the example and said it was an "anomaly" not caused by human intervention.

"There's a perception that we've got people sitting there watching all of these things and we go, 'Yahoo, we can put the price up'," Mr Sharp said.

"There was no-one looking at it, the prices went up because the system automatically says, 'demand is up, so price goes up."

Mr Sharp said the process was driven by algorithms not one of their 15 human staff who do demand forecasting for the entire company.

"Everyone was trying to look at the fares and the more people that went on and looked at them, the more our machine was saying, 'look, there are a lot of people interested in flying'," he said,
So I imagine due to the higher number of searches (not just sales and lower number of seats) the pricing of these seats was pushed up automatically. I worry that 'personalised' pricing will come soon unless it is outlawed for public policy reasons not just in the airline industry but a whole heap of online sales markets.
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