The lucky dip of stumbling on a cheap seat on a popular flight is starting to disappear. Airlines are handing their pricing to artificial intelligence, and on busy routes that mostly means one thing: higher fares.
Carriers have long priced seats with analysts and rules of thumb, such as bumping fares by 20 per cent once a flight is a quarter full. AI replaces those spreadsheets with models that weigh dozens of variables in real time and adjust continuously to demand, Bloomberg reported.
The effect is to shrink the pricing gaps that once let travellers find bargains. Airlines from Delta to Virgin Atlantic are adopting the tools to squeeze more from every flight. They sell fewer seats below what they think you will pay, and pack planes closer to capacity.
Cheaper too, sometimes
It is not all bad for flyers. The same models can cut fares on quieter routes to fill empty seats, so off-peak and low-demand flights could get cheaper.
“Consumers should expect that airlines will be smarter about their pricing,” said Bryan Terry of Alton Aviation Consultancy. They will “exploit that capability to raise fares where possible and cut prices where they have room to stimulate demand.”
Whether that helps travellers is contested. Booking early or smart can still beat the average fare, one analyst noted. Critics counter that airlines run on thin margins and will use ever-sharper tools to lift average fares and fill more seats.
The secret sauce
Israeli startup Fetcherr is one of the firms driving the shift. Its platform is used by nearly a dozen carriers, including Canada’s WestJet and Brazil’s Azul. During recent Middle East disruptions, it repriced flights worldwide in response to oil swings, cancellations and shifting demand.
“Our models analyse dozens if not hundreds of classes of variables to come up with fares. You can only now do that because of AI,” said co-founder Uri Yerushalmi. The company says it lifts revenue mainly by filling more seats, not by raising ticket prices.
AI is extracting value even after you buy. Volantio’s software, used by Japan Airlines, spots passengers who might swap a busy flight for a voucher. It then resells the freed-up seat to a last-minute business traveller for $1,000. The same tools are moving through hotels and booking, too.
The worry: surveillance pricing
The bigger fear is where this goes next: fares aimed at each traveller’s highest “willingness to pay,” what analysts bluntly call the “pain point.” Consumer advocates and US lawmakers have warned that airlines could use generative AI for “surveillance pricing”, charging different people different fares for the same seat based on data such as browsing history or income.
That is no longer purely hypothetical. The US Federal Trade Commission has opened a civil investigation into whether airlines use individualised data profiles to push up prices, Simple Flying reported. Some states have moved first, with Maryland passing a Protection from Predatory Pricing Act. Regulators elsewhere are circling too, after cases like China’s Trip.com fine.
The firms say they are not there yet. Delta, which declined to comment, has publicly denied setting fares using personal information. Fetcherr says its models use aggregated market data, and Volantio says its offers are not personalised.
For now, the squeeze is about the aggregate, not the individual. As AI keeps reshaping what consumers pay across travel and beyond, the old trick of hunting for a hidden bargain fare is quietly getting harder.
