With airlines keener than ever to maximize revenues, dynamic pricing is making inroads into the industry. Not everyone is welcoming the trend, but industry insiders say dynamic pricing can benefit both passengers and airlines.
Airlines know a lot about their passengers, dynamic pricing harnesses that knowledge
Dynamic pricing is a process whereby an airline will pitch a fare at you based on what they know about you or think they know about you. Airlines are masters at gathering data. They harvest your frequent flyer data and track your searches and interests online via cookies. Hand over your Amex details to buy a drink inflight or a case of wine from the airline’s wine store and that airline gets an insight into your drinking preferences. Hundreds or thousands of these tracked behaviors all add up.
Airlines already know a lot about their passengers – we’ve largely lost or surrendered that privacy battle. Now, many airlines are harnessing that data and learning to use it to boost revenues. On an individual passenger level, dynamic pricing tries to determine what a passenger is willing to pay to fly from Madrid to Heathrow next Sunday.
Just how much will a passenger pay to fly at a certain time on a certain day?
Justin Jander, Director of Product Management at digital commerce platform PROS says airlines are trying harder than ever to create a sticky…