When Billy Joel sang about a “New York State of Mind” he was talking about going home to the Big Apple.
27.07.2023 - 18:36 / smartertravel.com
There’s a mounting possibility of a big shake-up in how you purchase your airfare, some travel outlets report: Major airlines might soon employ a new technology called dynamic pricing to assign different fares to different types of air passengers without their knowledge.
In fact, sources say, some airlines are probably using a rudimentary version of dynamic pricing already. It seems any time an airline thinks it can squeeze more money out of each passenger, you can bet it will. Here are nine questions you might have about dynamic pricing, answered to reveal how the technology could affect you.
Related:Do Booking Sites Raise Prices Based on Your Search Habits? What is dynamic pricing?The fundamentals of dynamic pricing are simple: When you search for an airfare, an airline uses information like your search history to display prices based on which fare class it believes you’re most likely to prefer, and how much it calculates you’re willing to pay. The fares you see might be very different than the ones shown to other customers searching exactly the same trip at the same time.
Does that mean the airline has to know who I am?Yes. In order to tailor the prices displayed to you, an airline has to recognize you and have some data about your travel-buying history. If you’ve ever bought anything on Amazon, you’ve seen how it works: Log on, and suggested items reflect your purchase and browsing history with the site.
Related:14 Myths About Booking Cheap Flights How does an airline recognize me?That depends on how you’re searching. If you log onto an airline’s site directly from one of the devices you use most frequently, that device probably already has a cookie (tracking technology) that identifies you to the airline.
Even without a cookie, your device’s unique IP address can provide a key to trace your identity. If you enter your frequent flyer number, the airline has even more information about you. According to trade reports, an airline can identify you even if you’re logged in through an online travel agency such as Expedia, although the exact mechanism isn’t completely clear.
How does an airline set dynamic prices?At any given time, most airlines currently maintain up to 26 fare groups for their flights, ranging from bare-bones basic economy to first class. Several of the economy groups are base fares, plus extras like seat choice, a checked bag, and an in-flight meal. Airlines can change both the fares in, and number of seats allocated to, each fare group several times a day. They may also leave them at a set level for several days.
At its most basic approach, an airline sets a dynamic price by selecting which established fare group to show you, based on what its system believes you’re likely to
When Billy Joel sang about a “New York State of Mind” he was talking about going home to the Big Apple.
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