Airfare Expert: Do cookies really raise airfares?

George Doyle, Getty Images

For years consumers have suspected that airline and travel agency websites use Internet cookies to their advantage – and to the disadvantage of the customer. Rick Seaney tackles fact and myth.

For years consumers have suspected that airline and travel agency websites use Internet cookies to their advantage – and to the disadvantage of the customer. Rick Seaney tackles fact and myth. less

For years consumers have suspected that airline and travel agency websites use Internet cookies to their advantage – and to the disadvantage of the customer. How? When airlines "sense" a shopper is about to book a ticket, they quote higher prices.

Writer Bill McGee, in a column on this site, suggested that this happens with regularity. His piece titled, "Do travel deals change based on your browsing history? " even noted that this business practice might veer into the territory of "price discrimination."

One proposed antidote would be to delete browser cookies - before, during and after shopping - to erase the crumb trail. That's a painful task for even the most Internet savvy. Before determining whether you need to do this, though, let me address this myth (and myth is what I strongly believe it to be) by starting off with a couple of geeky facts:

1. Airlines typically offer more than a dozen price points for the same seat on the same aircraft - prices and rules that can and do change frequently throughout the day. Simultaneously automated inventory systems decide at any given moment which price point to offer a shopper, based on dozens of factors including current and historical bookings.
2. Air travel quoting systems struggle beneath an avalanche of queries each day (the vast majority of which never result in a booking), and these systems use a variety of technology shortcuts like reusing earlier responses or "guesstimating" actual airline inventory.
3. Have your eye on a particular deal? Bookings for that flight can occur even as you are contemplating your purchase (especially if it is a really good deal).
4. Any website worth its salt uses cookies (ostensibly to provide a better user experience).

The question is, are these travel sites smart (or brazen) enough to target your personal behavior via cookies to jack up rates and pocket the difference? Or is this price-jumping behavior simply an artifact of airline pricing technology and the shortcuts used by quoting websites to handle the insatiable demand for ticket quotes?

My educated guess is the latter, but not because the airlines wouldn't like to try different pricing methods for different customers. In fact, they're already "accidently" conducting such experiments and possibly more worrisome, planning to implement the myth.

Case in point: Orbitz was recently dragged over the coals for changing the default display of their quoting results for users of Apple products - the theory being that people who could afford these pricy gadgets could afford to pay higher prices. While I thought the media's coverage was overhyped — to me it was a matter of Orbitz re-ordering its list of prices (the cheaper prices were just not at the top) — it hit all the major and social media outlets like wildfire.

Meanwhile, Delta Air Lines' website tested pricing engines of two different companies, performing separate experiments for both "loyal" logged-in customers and not-so-frequent fliers (not logged-in) simultaneously which, as you might imagine, returned some very different results. Again, the discrepancy became a very big story, prompting an explanation from a Delta vice president who opined that now everyone's on the same search engine and ultimately all will get the "new improved search function".

Even as we speak, more than a dozen of the world's biggest airlines are in the midst of getting government approval to "augment" the current airline pricing technology into something more akin to the urban legend about cookies and higher prices. But in reality, it's all about prices tailored to specific shoppers – a so-called "New Distribution Capability." No surprise then that those who are concerned about privacy and higher fares are starting to give this their full attention.