Most of this story was written last year, after I returned from the annual PhocusWright conference where the top dogs in the Internet travel world congregate to discuss trends and networking. One of the “marketing” demonstrations from Sociomantics made my blood run cold.
As a member of the Advisory Committee for Aviation Consumer Protections, I brought this subject up at a meeting earlier this year about personalization and customization of airfares. The committee even got to see this video. It begs a privacy solution as well.
As the current Department of Transportation (DOT) rulemaking comment period ends later this month, these issues are coming into focus again while DOT decides how to handle these new technologies. Will we have published airfares and fees or will the prices we see as consumers be created on the fly by algorithms operating behind the scenes in IT systems?
Basically, the system allows for realtime personalization in the background where consumers can’t even imagine what is going on. If this system comes to airline tickets, it will destroy the ability to comparison shop for airfares. Plus, as airlines begin to disclose ancillary fee data, it will make comparisons even more difficult.
Recently, the International Air Transport Association (IATA) has asked DOT to approve a resolution that they concocted at a recent meeting of the world’s airlines. It is one of the most dramatic examples of the airlines’ view of personalization.
Airlines see personalization or customization of air travel costs as a system where they collect data about individuals and then create a price that is “personalized” for the consumer. That personalization will take into account personal information gleaned from frequent flier programs, prior purchases, credit card records from airline affiliated cards and data purchased from data brokers.
Consumers and travel agents see “personalization” or “customized pricing” as something that consumers create through the ability to purchase services the customer wants from a menu of ancillary services provided by the airlines.
In one system, the airlines — through a deus ex machina fiat, based on collected data — would do the “personalization.”
The other system would allow the customer to “customize” the flight by picking and choosing what services the passenger desires.
The airlines have the shoe on the wrong foot. Plus, airlines still refuse to disclose ancillary fees at the time of booking on any site, nor do they allow travel agents (who sell more than half of all airline tickets) to display these ancillary fees or sell them.
Plus, airlines have not addressed the massive privacy liabilities that could come into play with such a system. Consumers would need a way to guarantee that the data used to “personalize” airfares was accurate.
Taking data from realtime shopping for airfares is one thing and is immediate and leaves a trail that can be followed in the future. But, combining that data with erroneous data collected from third-party sources may corrupt this entire behind-the-scenes marketing scheme.
Consumers beware. Don’t let the airlines have free rein over personalization. You should be able to customize airfares yourself and be allowed to compare pricing across airlines.