Flight prices are skyrocketing: The new technology that will change the market forever
Flight prices are constantly changing based on user data. However, traditional pricing methods are being replaced by complex AI algorithms, which may lead to the disappearance of cheap flights.
It is no secret that flight prices are constantly changing, and two passengers sitting next to each other on a plane likely paid completely different amounts. Until now, this "dynamic pricing" was based primarily on general supply and demand, the booking date, and basic tracking of our search history. However, it now seems that the old methods we used to "outsmart the system" are about to become irrelevant.
Price personalization
The world's leading airlines are preparing to adopt new, much more sophisticated pricing systems based on artificial intelligence (AI). According to reports, these systems will analyze millions of variables for each individual passenger to accurately estimate how much they are willing to pay at that moment. The information will be weighted based on data such as the type of device used, geographic location, and frequent flyer club status.
This phenomenon, known in the industry as "Surveillance Pricing," is designed to find what analysts call the "pain point" — the maximum price a customer will agree to pay before giving up on the purchase. Critics and industry experts warn that this is a distinctly anti-consumer move that could almost completely eliminate cheap flights.
The level of tracking offered by the new technology is particularly invasive. Theoretically, using external databases, airlines could cross-reference your email address or device with information about your income level, the value of your real estate, and your consumption habits. The systems will even be able to track your browsing behavior in real-time — for example, how long you hovered your mouse over a certain flight option, or whether you hesitated before closing the window.
Although some airlines were quick to deny using these practices, the concern in the industry is real. As of today, what is delaying the full deployment of these technologies are mainly regulatory barriers. In the United States, for example, the Federal Trade Commission (FTC) has already opened a civil investigation to check whether airlines are using personal data profiles covertly to raise prices.
As a reminder, the Lufthansa Group announced that it is significantly increasing its operations in Israel ahead of August. The main surprise is the return of the SWISS airline for the first time since March. The company will land at Ben Gurion Airport tomorrow, Saturday, August 1, on a flight from Zurich, and is expected to operate a daily flight on this route.
