Flight Prices to Get Personal? Airfares Could Vary Depending on Who Is Traveling

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Travelers are annoyed by the very real possibility that they’ll sit down on a plane next to someone who paid much less for the same flight. Potential changes to how flights are priced in the future could be even more annoying.

Consumers like the idea of an even playing field: Everyone gets the same opportunity to snag a good price on a product or service. Getting a deal is generally a matter of perseverance and timing. The price is the price, and the dollar figure one sees has nothing to do with who you are or your history of purchases.

A system that functions otherwise—with “personalized” prices, causing some to pay more and others less for the same item, purchased at the same exact time—strikes many as unfair. Consumers have had reactions ranging from outrage to mild “they’re-screwing-us-again” aggravation when news has broken of such “personalized” or “customized” pricing. Three recent examples: Delta was apparently overcharging frequent fliers last year; Orbitz showed higher-priced hotels to Mac users; and the Wall Street Journal reported that Staples’ website varied in-store and online prices based on how close the shopper was to an Office Depot or OfficeMax.

(MORE: What Can Consumers Expect from the American-US Air Merger? Nothing Good)

Now, according to a New York Times’ editorial, most of the world’s big airlines have OK’d a new pricing system, and the result is that passengers could be offered different fares depending on “how regularly they fly, where they live and the kind of trip they are taking.” Instead of fares rising or falling based on when the ticket is being purchased or whether the seat is in coach or business class, other more “personalized” factors will be incorporated, so that the results of your flight search could be much different than your business traveler neighbor.

Such “personalized” shopping options are always presented merely as a way to give consumers what they want. The Times notes that industry officials say the system is “simply a way for airlines to better tailor their services to the needs of their customers.” And yet:

It seems clear that the standard, as described by the group, could also be used to present higher fares to, say, a business traveler who airlines determine could pay more because she travels between New York and Dallas every week. Airlines will also have a big incentive to present much higher basic prices when customers shop anonymously to encourage them to provide more information about themselves in order to see “special deals.”

The Business Travel Coalition (BTN), a consumer advocacy group, stated in a release that the new system, called “Resolution 787,” would “negatively and significantly impact airline competition and would drive up airline prices for consumers.” It also raises serious privacy concerns; before getting the price of a flight, you might be asked to provide personal info including but not limited to your name, marital status, nationality, and frequent flier status. The airlines will probably also be able to access your travel and purchase history, all of which may be used to justify offering you a higher fare than someone else, according to the BTN:

Many of these items of sensitive personal information can be used very effectively to pinpoint, and extract higher prices from, those travelers who are likely to be less price elastic — such as business travelers and travelers whose shopping and travel history demonstrate they do not regard connecting services as viable substitutes for non-stop services on particular routes or do not consider alternate airports serving the same area as substitutes for one another.

(MORE: End of New Airline Fees? Nation’s Most Fee-Crazy Airline Is Tapped Out of Ideas)

The onslaught of fees has been the dominant story in the airline business over the past several years. Now that carriers are running out of fees to charge passengers, it seems as if they’ve come up with a concept that travelers will likely find even more aggravating and unfair—a pricing system that’s biased by design.

30 comments
MissRaluca
MissRaluca

@TIME it's debatable. I believe the miles idea is good enough - the more you fly, the more miles you get that you can use for discounts

ajw1970
ajw1970

@TIME volume discounts... Works for everything else... No?

paragkabat
paragkabat

@TIME airfare has to depend on variables, and customers who fly frequently should be given a fair advantage.

Shhh_ay
Shhh_ay

“@TIME: Airfare might get personal. Do you think flying frequency should determine your price? | http://t.co/oKriDnzGYY” YES !!!

mrjoco69
mrjoco69

@TIME It might be time to take that car back on the road for longer trips.

hanrod1
hanrod1

It is most appropriate that business travelers ALWAYS pay more for their tickets, BECAUSE THEY (if self-employed) OR THEIR EMPLOYER DEDUCTS THE COST FROM THEIR TAXES, as a "cost of doing business". As a result, OTHER, GENERAL, TAXPAYERS ARE PAYING FOR PART OF THIER COST.

MichaelJohnson
MichaelJohnson

how about charging by total weight, much like the mail industry.  your weight, plus the weight of all your luggage.  and that would encourage americans to lose weight, too!

reddles
reddles

@TIME: No, pricing should always be the best possible..reward frequent travelers with better loyalty rewards / lounge perks #mytwocents

tokai_yukiko
tokai_yukiko

そんな案が出てきているのか QT @TIME Airfare might get personal. Do you think flying frequency should determine your price? | http://t.co/hbgwuI32OP

FBunney
FBunney

@TIME ... So the ones that do not travel will have less incentives to start?

aallisonr
aallisonr

@TIME why not? Plenty of distributors of goods and services reward frequent patrons

LinaresRhannyel
LinaresRhannyel

@TIME no an airlines ability to get me somewhere safely and on time should determine the price of my fare.

akuusidavid
akuusidavid

@TIME ofcourse no! But nowadays? It can be.

Stacat1
Stacat1

Is this legal is the big question? is it legal to price services/products based on personal information?

What is the rationale for charging more to one person than another when the service provided is the exact same? I would love to see the legal defense on this? Just because they can afford it doesn't seem to hold water.

If an airline came out and said we are going to charge minorities this price and whites this price- I wonder how that would fly?  It's price fixing based on personal data ie: race, religion, occupation---seems ripe for a discrimination lawsuit on a massive scale.

Joe Baxter
Joe Baxter

Who runs a business like this? I wonder if a gas station did this, how people would act. So your a fatass and you want a soda, how does 3.50 for a 2liter. You're a drunk, let's bump up the price alittle of beer after giving it to you dirt cheap.

Claire CheNault
Claire CheNault

Screwing over frequent fliers is a great idea and won't backfire at all.