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Airlines move to price seats on personal information

March 16, 2018 Headline News No Comments Email Email

Call it the ultimate in yield management – a world where every airline seat is priced according to the occupier’s personal profile, gathered through their online browsing habits and their potential worth to the airline.

The process is called dynamic pricing and airlines are moving towards it fast, according to reports from the UK. A number of different technologies, including facial recognition and the gathering of information, ranging from browsing habits to age and salary, is coalescing, with the ultimate goal being to offer passengers a unique, personalised price for each seat.

A recent article in Britain’s Daily Telegraph quoted a white paper on pricing written by the Airline Tariff Publishing Company (ATPCO), which counts British Airways, Delta and KLM among its 430 airline customers.

“The introduction of a Dynamic Pricing Engine will allow an airline to take a base published fare that has already been calculated based on journey characteristics and broad segmentation, and further adjust the fare after evaluating details about the travellers and current market conditions.”

All-encompassing algorithms

The Telegraph quoted John McBride, director of product management for PROS, a software provider that works with airlines including Lufthansa, Emirates and Southwest, saying several operators have already introduced dynamic pricing on some ticket searches. “2018 will be a very phenomenal year in terms of traction,” he told Travel Weekly. “Based on our backlogs of projects, there will be a handful of large carriers that move toward dynamic pricing.”

One question is whether dynamic pricing would breach consumer laws. Some call it “fare discrimination”. Airlines do something similar already through yield management but that is collective, not individually targeted.

Internet browsing provides a trove of information and new, smarter algorithms make it very difficult to stay untracked as you move about the web.

Facebook can now recognise you in photos without your having to bother tagging yourself. Many other companies are working on facial recognition. Mobile applications can reveal where users are any time of day.

Just a week or so ago, Facebook advised users:

Hi, we’re always working to make Facebook better, so we’re adding more ways to use face recognition besides just suggesting tags. For example, face recognition technology can do things like: 

  • Find photos you’re in but haven’t been tagged
  • Help protect you from strangers using your photo
  • Tell people with visual impairments who’s in your photo or video 

You control face recognition. This setting is on, but you can turn it off any time, which applies to features we may add later. 

-The Facebook Team

Tech site Gizmodo has pointed out that so many websites and third-party services use Facebook technologies, from Like buttons to login options, “that Facebook has a pretty good idea of what you’re up to when you’re not actually on Facebook”. In some cases people can revoke permissions in settings, but most don’t bother.

Third-party apps are constantly analysing and using data as well. By combining data on online purchases and location with records provided by marketing partners from various sources, social media channels can assess someone’s approximate financial worth.

The latest step, experts say, consists of building individual profiles so that third parties like airlines can base prices on them.

Written by Peter Needham

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