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DENVER — It would be “irrational” for airlines to use budding personalized pricing capabilities to overcharge specific customers, said a United executive.
Jeff Christensen, the carrier’s managing director of distribution and ancillary pricing, made the remark during a panel at the CAPA Centre for Aviation’s 2019 Americas Aviation Summit on Monday.
“The point of an authenticated shop is you can cut through the clutter and have the options related to you,” Christensen said, referencing sales in which the buyer’s identity would be verified. “We don’t want to experiment in something that is punitive. It wouldn’t make sense.”
Use by airlines of IATA’s New Distribution Capability (NDC) in third-party channels, including the GDSs, is still in its infancy. Over time, airlines anticipate that NDC will enable them to move away from the legacy technology limitation of offering just 26 fare codes and to a distribution landscape with an unlimited range of fare offerings. That shift is expected to increasingly allow airlines to personalize fare offers and sell ancillary products through travel agencies.
Speaking as part of the panel at the CAPA summit, Christensen said United sees personalized pricing as an opportunity to provide value to customers. For example, the airline might see that a shopper flies often but has never purchased an Economy Plus ticket. United could then make a an Economy Plus discount offer with an eye toward familiarizing the customer with the higher-end product.
The panel also addressed concerns that airlines could use personalization to harm consumers. Those concerns raised enough noise last year to lead Senate minority leader Chuck Schumer (D-N.Y.) to pen a letter to the Federal Trade Commission asking for an investigation into the potential for price discrimination.
On Monday, American Express GBT distribution director John Bukowski said that as personalized pricing becomes more widespread, shoppers must still be able to search for fares anonymously. Having what he called a “dual pipeline” will assure transparency and guard against abuse.
Jeff Klee, CEO of corporate booking technology provider AmTrav, also offered a note of caution.
“My feeling is in the beginning you aren’t going to be hurt by the airline knowing who you are. Down the road, who knows how it will work out and it will vary from airline to airline,” Klee said.
Source: travelweekly.com