Travel

7 Answers

The short answer is: in some cases yes. Most of the time, no.

Given what I ve seen in other answers, I think it s worth giving a longer answer and clarifying what mechanisms airlines use to compute the prices you see on their websites.

On the one hand, there is a traditional way of changing prices over time and for different buyers.

Airline fares, for any given flight, vary according to 3 main factors (this is a bit simplified of course, as it s actually a very complex world):

- a wide set of static fare rules, such as the week-end rule, which makes some fare available only if you stay over a weekend; other examples include discounts for children or senior people, etc.

- the point of sale, which can discriminate between, for instance, travel agencies and airline offices or websites, but also between more high-level concepts, such as country of visitor (based on your IP address), website section, etc.

- the availability of booking classes , which are artifical subdivisions of cabins; this is handled by the so-called revenue management systems, and is the main reason you see prices going up and down over time, as these classes get closed and opened again in order to find the optimal balance between what people are willing to spend and how many people are willing to spend, at any time, for any flight

The above is the way fares have always (ever since electronic computation of prices was made available to travel agents) been computed. The usage of country-based price changes or similar patterns that you can see on airline websites have been there for a long time. It s all very much demand- and market-based pricing, which exists in any retailing industry, even (and especially) in the physical world.

This explains that using a VPN based in another country could show different prices. Sometimes just changing the country setting on the website, away from the default chosen based on your IP address, can do the trick. Some airlines want to enforce their market-based pricing by requiring a physical mail address in the selected country at payment time.

On the other hand, the example mentioned about Delta upping the prices for frequent flyers is a newer trend, which to my knowledge did not exist in airlines until very recently. It s often called dynamic pricing, although that term is too generic to be useful, in my opinion. It takes the price discrimination much further by customizing prices based on much more advanced (and dynamic) criteria. In this case, the frequent flyer status; it could also be such things as past purchases, frequency of visits as you mentioned, etc. Anything that might give the airline an indication of your (statistical) willingness to pay.

It was first introduced, a long time ago, by Amazon, who had to back out of it after getting lots of bad publicity. It seems they are now doing it again, as are many only retailers. Here is an interesting article about this: http://www.groovypost.com /howto/.

In the airline world, I m pretty sure it works very basically by filtering out some of the cheaper fares (which are still calculated in the same way as mentioend above) from the offer on display (either by not considering those fares, or making them unavailable through specific point-of-sale or revenue-management rules).

To me, it s a risky practice. As a Delta customer, I d be pretty annoyed to see I m paying more than the average guy, just because I m loyal to the brand! So, to a certain extent, I doubt the practice is very sustainable. But milder forms might persist in the future. As you can see in the article, even clearing cookies or going incognito might not be enough, as the browser you use could be used to put you in a specific demographic basket, that would increase or decrease the price you see. But comparing the price you see as a logged user with a cookie record against the anonymous one might be a clever move to double check you re not getting robbed by a greedy airline.

As the article mentions, this newer form of dynamic pricing is the digital equivalent of haggling, whereas the more traditional pricing schemes explained at the top correspond to setting the prices by market and channel in the retail world.

Overall, I would say that today the most impactful use of price discrimination is the country-based one (if we ignore, of course, the time-bound volatility linked with revenue management systems). For this, going anynomous doesn t help, what you can do is to change the country the website thinks you re in (through website menus when available, or a trick like a VPN otherwise). Besides that, I would be tempted to say that airlines would be taking big risks to do anything significant. But you never know, so why not do a quick check before purchasing?