Are “custom” airfares good – or evil?

Studio Go/Shutterstock
Studio Go/Shutterstock
One way or another, the way you buy an airline ticket is about to change.

Behind the scenes, the propellerheads who create your fares are working on a smarter way to sell tickets. The airline industry is developing technology standards that could serve up a special fare intended only for you, based on how often you fly, where you live, your gender, age or marital status. But online travel agencies and consumer advocates are skeptical of customization.

Well, this is one time the airline industry almost got it right.

Custom fares are a terrific idea, as long as they’re done with the passenger in mind.

But the industry’s proposal, called Resolution 787, needs a little work before regulators with the Department of Transportation clear it for takeoff. There’s a right way to customize a fare, which puts air travelers in control, allows them to easily compare fares and doesn’t require they surrender any personal information. And, there’s an evil way.

“If by ‘customized’ you mean the airline will use its collected marketing knowledge of me to offer a special price just for me, then it is not going to be what I want,” says Jim Elekonich, a senior applications engineer from Toledo, Ohio. “It’s what they want me to want. How can it be anything else?”

Elekonich is afraid that custom prices, if they’re offered by the airline, will be a rip-off, “but with no way to prove it, since everyone else’s customized pricing will be known only to them,” he says.

The International Air Transport Association, the airline trade organization behind Resolution 787, claims custom fares would allow you to compare prices to ensure you’re getting the best deal, and it’s been making the rounds in Washington with a multimedia presentation to convince critics of its good intentions. But the association says the ability to generate a custom fare is just a technical standard, and can’t guarantee it will be used to make airfare shopping easier or more straightforward.

Passengers don’t trust the airlines.

“Just the fact that airlines want to do this should be a big clue that it isn’t in consumers’ best interests,” says Rachel Thuerk, a risk manager from Cambridge, Mass. She’s afraid airlines will use their technology to calculate the maximum price you’re willing to pay for a ticket, then make that offer directly to you, and no one else, meaning you could end up paying more than you otherwise would under the current system.

It’s something she says the aviation industry already does too well.

“Airlines are actually better at this kind of price-setting than most other industries, since they can charge different prices based on days and times of travel and length of time before flights are booked,” she says. Customization would allow them to do that on an individualized level, she adds.

Of course, there’s a correct way to customize a fare. Already, passengers feel betrayed by “unbundling” — the act of quietly stripping the ability to check a bag or make a confirmed seat reservation from a base fare, in order to earn more money. Last year alone, the airline industry pocketed $27 billion in these “a la carte” fees.

With customization, the airline industry could have the opportunity to rebundle its fares on its own terms. That would be the wrong way to do it.

Customization only works when the consumer has some control of the process. If you can click on your favorite online travel agency, type in a destination and tell the airline what you want, such as onboard wireless Internet, a meal and a checked bag, then see the best offers from several airlines and compare them side-by-side — now that would be customization done right. (IATA insists its system would do something “similar.”)

Travelers are also worried about how much personal information they’d have to give up to receive a customized fare. As it stands, airlines seem to want as much information as they can collect before quoting a price under the proposed new standards, including your frequent-flier number, full name, date of birth and marital status.

While some of that data is collected at the end of the booking process for security-screening purposes, none of it should be necessary to give you a fare quote, say travelers.

“I don’t have a problem if airlines want to use technology to help their customers find service more amenable to their liking,” says Frank Hawkin, an online consultant in Washington. “Where I have a problem is creating the lack of transparency in pricing so travel agencies and individuals can’t see all the fares and pricing offered.”

Will the airline industry do the right thing, using the technology to allow us to find and compare the best fares? Jim Davidson, president of Farelogix, a travel technology company, says competition will keep the airlines honest, and as long as passengers “don’t feel as if they’re being profiled,” the flying public won’t mind customization.

What’s more, the new technology standards, if approved, would allow your airline to offer you things you didn’t even know you wanted. For example, what if you’re flying with your family, and you all want to be seated together, and have a power outlet so you can recharge your iPad on the journey? Customization would let your airline present you with a special package that guarantees those amenities.

“The technology can be used for good or for evil,” he says. “I believe it will be used for good.”

I hope he’s right. But we can rest assured that putting us, the consumers, in charge of choosing what we want, rather than having the airlines tell us what we want, is the best way to fly.

Are "custom" airfares good or evil?

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