Look out when you travel, Big Brother is peeking over your shoulder.
The International Air Transport Association, which represents airlines around the world, approved a plan last week to offer tailored ticket prices for each customer. All you have to do is provide the airlines with your personal information, such as frequent flyer numbers, address, travel history, or travel plans. The airlines will then personalize ticket prices or rolls perks and fees into the prices – based on your information. A test of the system will start next year and could be adopted in its entirety by 2016.
The move is an attempt to combat the growing influence of online travel comparison sites, like Kayak or Orbitz, to which airlines have to pay fees. Only 40% of tickets are bought directly from airlines.
Greg Hobica, founder of AirfareWatchdog.com, says the airlines have been trying to kill off travel comparison sites for years. They’ve offered promotions, better seats and frequent flier miles to try to get customers to buy tickets directly from the airline – instead of from Kayak or Orbitz.
“It’s almost like Wile E. Coyote,” jokes Hobica. The coyote keeps coming up with crazier plans to kill the road runner, but it always backfires. This plan will backfire too, predicts Hobica.
Most passengers, he says, will likely continue to use sites like Kayak or Orbitz and will simply opt out of providing information or logging in. Most passengers don’t even have frequent flier numbers, he also points out. “For the vast majority of passengers, it won’t make any difference at all,” he says.
But, it will make a difference to consumers if it makes it harder to compare prices, or those personalized prices aren’t offered on comparison websites, which would be “anti-consumer,” he says. It could also, potentially, drive up prices for those people who don’t want to share their information.
There are also obvious data-privacy issues. The airlines say that the personalized prices will be offered even through travel agents, but that means your personal information would be widely shared. And, there is the risk that airlines could use the information in ways people might not be happy with. They could, for example, charge more to people who live in wealthier zip codes, some critics say.
The airlines claim, though, that they’re simply trying to offer more customized rewards to loyal passengers, which they haven’t been able to do through online travel comparison sites.
"Forty years after the birth of the current distribution paradigm, we have an opportunity for a revolution in airline retailing," said Tony Tyler, chief executive of the International Air Transport Association.