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Finding cheap air tickets on popular routes may become harder as airlines expand their use of artificial intelligence. Carriers now use AI airline pricing systems to adjust fares in real time instead of following fixed rules set by revenue teams.
These tools study booking demand, seat availability, fuel costs, cancellations and travel dates. Airlines can then reduce the number of seats sold below the price they expect travellers to pay.
Airlines traditionally used analysts and set formulas to manage ticket prices. A carrier could raise fares after selling a certain share of seats or lower prices when bookings slowed. However, AI systems can review many factors at once and change prices throughout the day.
According to Bloomberg, airlines including Delta Air Lines and Virgin Atlantic have adopted AI-based pricing tools. The systems help carriers respond faster when demand rises. They can also lower fares when flights have many empty seats.
“Consumers should expect that airlines will be smarter about their pricing,” Bryan Terry of Alton Aviation Consultancy told Bloomberg. He added that airlines would “exploit that capability to raise fares where possible and cut prices where they have room to stimulate demand.”
AI pricing can make unusually low fares harder to find on popular flights. The models compare current demand with past booking patterns and market data. They then update prices closer to what airlines estimate passengers will accept.
Meanwhile, the same technology may produce cheaper tickets on routes with weaker demand. Airlines can reduce fares to attract bookings and fill more seats. Therefore, AI does not raise every ticket price, although it may reduce bargain fares during busy travel periods.
Israeli technology company Fetcherr supplies AI pricing software to nearly a dozen carriers, including WestJet and Azul. Co-founder Uri Yerushalmi said its models review a wide range of information before setting fares.
“Our models analyse dozens if not hundreds of classes of variables to come up with fares,” Yerushalmi told Bloomberg. “You can only now do that because of AI.”
Fetcherr says its software raises airline revenue mainly by helping carriers fill seats. During recent Middle East travel disruptions, the platform adjusted fares in response to oil prices, cancellations and changing demand.
Airlines also use AI after passengers book tickets. Volantio, whose software is used by Japan Airlines, identifies travellers who may accept vouchers to move from full flights. The airline can then sell the released seat to another customer at a higher last-minute fare.
However, consumer groups and lawmakers have raised concerns about personalised or ‘surveillance pricing.’ Such systems could charge passengers different fares for the same seat by using personal data, including browsing activity or income estimates.
According to reports, the US Federal Trade Commission has examined whether airlines use individual customer data to increase prices. Maryland has also passed legislation aimed at predatory pricing practices, while other regulators are reviewing similar concerns.
Airlines and technology providers say their current systems do not use personal information to set fares. Delta has denied using personal data for ticket pricing. Fetcherr says it relies on aggregated market information, while Volantio says its passenger offers are not personalised.
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