Time to get real about real-time airfares

Little Miss/Shutterstock
Little Miss/Shutterstock
Sue Marcus was looking for a flight from Washington to Tulsa.

Instead, she found trouble.

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Every time the American Airlines Web site asked her to select a return flight, it came back with an error message saying that the fare she’d selected was “no longer available.” She phoned the airline to finish the reservation. “A customer service agent told me that she couldn’t use the same Web system that the public sees, though she found a fare that was $50 higher than the flight I’d originally chosen,” says Marcus, a retired government worker from Fairfax, Va.

When Marcus asked why this was, the agent said that bookings are made in “real time,” while the Web site updates aren’t. In other words, Marcus was seeing fares that had already been purchased by someone else. “The representative said that there had been lots and lots of complaints about this issue,” she recalls.

That’s true. Gripes about what some call the airline “bait-and-switch” scam cross my desk regularly. Passengers find an affordable ticket price displayed on an airline Web site or by an online travel agency such as Expedia, Orbitz or Travelocity, but the fare vanishes when they try to buy it. Passengers like Marcus then have no choice but to book a more expensive flight.

But help may be on the way. A proposal by the International Air Transport Association would establish a new standard for selling airline seats, called the New Distribution Capability.

Such a system would offer “real-time” fares, completely eliminating one of the most persistent problems for travelers who book their own airline tickets.

Problem is, a large part of the travel industry wants nothing to do with the NDC — and with good reason. The NDC proposal, which is pending approval by the U.S. government, was created without any meaningful input from travel agents and other travel technology companies. If the system is implemented as critics predict it will be, it could actually make airfare shopping harder and force passengers to pay more for their tickets.

The two groups — the IATA and a coalition of agents and technology companies called Open Allies for Airfare Transparency — are making the rounds in Washington this summer to talk about the future of airline tickets, with decidedly different viewpoints. At stake isn’t just the fix to Marcus’s ticket problem, or even the way we book airfares in the future. The entire travel distribution system could be affected by the outcome of this debate.

The IATA’s vision of the NDC’s effect on travel is admittedly optimistic. It says that if the government approves the standards, passengers will be able to shop for airfares, compare prices and amenities, and receive special offers if they choose to share personal information, such as their frequent flier number, age or marital status, with an airline. What’s more, the new system might allow holdouts such as Southwest Airlines to be more widely available through online travel agencies, which they currently aren’t. The IATA made these claims to me in an impressive half-hour PowerPoint presentation that suggested how travelers might use the NDC.

“Consumers would benefit from it,” says Perry Flint, an IATA spokesman.

Open Allies begs to differ. If the NDC is approved, shopping for an inexpensive airfare would be even more difficult than it is today, the group claims. An airline could refuse to show you its cheapest fare unless you register and share information with its site, and even then, it might show you confusing fares that include options such as in-flight wireless and free checked luggage. You might not be able to compare prices between airlines.

“The bottom line,” says Andrew Weinstein, a spokesman for Open Allies, “is that this will reduce competition.”

What’s really going to happen? The Transportation Department, which would have to approve the NDC, isn’t saying. Open Allies hopes that the IATA will scrap the proposal and start again, this time inviting it to collaborate on a standard that will include other stakeholders, both in terms of input and financial rewards. The IATA wants the government to rule quickly and in its favor, so that it can begin creating reservation systems based on its proposed standards.

If both sides agree on anything, it’s that we won’t see this new technology being implemented for at least five years, assuming that regulators sign off. And that’s the problem. Bickering about these proprietary distribution systems doesn’t benefit passengers.

You don’t have to be a consumer advocate to see that how you buy airline tickets — indeed, how you book travel in general — is stuck in the technological Dark Ages. If the various factions within the travel industry truly cared about innovation, they would have abandoned their antiquated mainframe reservations systems decades ago, when other industries embraced a little thing called the Internet. You might be surprised to learn that your electronic ticket reservation continues to be made on technology developed four decades ago.

When it comes down to it, the companies squabbling behind the scenes aren’t concerned about Marcus’s fare confusion so much as they are with who controls the ticket information or pockets a reservation fee. It seems that the only reason airlines are pushing for a change now is that they see an opportunity to increase their revenue through a new system; it seems that the only reason agents are fighting it is that they stand to lose money if that system is adopted. Passengers would be truly served if airfare data were released without any restrictions. Such a move would probably solve Marcus’s ticketing problems almost overnight.

And that may be the most unsettling part of this intramural skirmish: Rhetoric aside, consumers are bound to be even more confused when they buy a plane ticket in the future. Would Marcus, who purchased a costlier airfare, have been any less frustrated by booking on a hypothetical NDC system?

No one really knows. But I wouldn’t bet on it.

Will IATAs NDC be good for air travelers?

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39 thoughts on “Time to get real about real-time airfares

  1. I don’t see it happening, you have one plane and a vast number of outlets to transact the space on that plane. You have direct airline sites, OTA sites, F2F consumer travel agents, industry and commercial travel agents. You have sold seats, unreserved seats, purchases in process, holds, and reservations. It’s not really possible, to have instant real time data on the cost of a seat, there will be some length of delay as that inventory is priced, held, purchased or released.

    1. Agreed. The reason this happens so much with consumer OTAs is because they primarily work off of cached information, which is cheaper than real-time queries. There’s a substantial lag between data updates and actual fare availability.

      No excuse for it to be common with booking direct though… I know that it’s certainly possible for a seat to be “bought out from under you”, but it shouldn’t be happening THAT much.

      1. Except that it shows lowest price per ticket, but DOES not show actual number of tickets – you may want 4, and there are only 3 at that price. Here in my GDS, I can clearly see that, and offer to sell 3 at one fare and one at the higher, or all would need to pay the higher.

  2. I don’t see why the government has to get in the middle at all. In the technology industry, there is a common saying: “The great thing about standards is that there are so many of them!” If this “Open Allies” group doesn’t like IATA’s standard, they can produce their own and let the market collectively decide. There will inevitably be a period where both standards are available and some airlines will support one and not the other, likewise for travel agents. It happens, and no, it’s not ideal. But the likelihood of the “Alliance” getting the IATA to simply scrap what they’ve produced, forget about it, and start from scratch is approx. zero. Better airfare searching systems are already years overdue, and this standard has the advantage of being nearly complete. Maybe the two standards will merge down the road, maybe one will inspire changes in the other, who knows…

    I also don’t see a problem with airlines reserving their best fares for those willing to provide personal information. Knowing who is searching for what fares is valuable information, and it appears airlines are willing to pay for it. And I don’t see an issue in being able to provide a custom quote based on a travelers previous searching and travel history; there’s nothing unfair about one person being offered a different fare than somebody else. With fares being so dynamic, few people pay the same price right now anyway.

    As long as a search discloses included with the fare quote, I don’t see how it’s any harder to compare fares than what we have now; at the current time, every travel website will display a nice round number for your airfare quote, but you already can’t really compare the number Spirit gives you with the number Delta produces. But in a world that already doesn’t have consistent standards for what is included in a plane ticket, this is just more of the same.

    1. The devil is in the details, but it could make it MUCH harder than it already is to compare and understand airfares. At least today, people can learn how Delta’s and Southwest’s and Jet Blue’s and Spirit’s policies differ from each other, and that knowledge carries over to every flight search.

      In a world where every single fare quote is a “personalized offer” which could be associated with completely different terms and different included/excluded items, that doesn’t necessarily apply anymore. You may need to re-read terms and conditions from scratch for every search, and every “offer,” before you can assess and compare them.

      It’s also possible that one’s “personalized offers” could be more expensive than offers available for “new” or anonymous customers. So to be sure you identify the lowest fare available to you, you could have to do both an authenticated search and an anonymous search on every single carrier.

  3. With a huge number of potential inquiries and a similarly huge combination of flights, seats, and fares, yet simultaneously having very few seats for a particular fare on a particular flight, the goal of actual real time guaranteed “you can buy this” is slim, independent of whether the computations are on a mainframe or a server farm. The machinery of keeping track of all this will depend on the airline’s software, not whether or not it is being run on heavy metal or in the cloud.

    In practice, getting that offered fare now and in the future is and will be a lottery, as more than one buyer for one seat may be searching at the same time. The first click may win, or the airline computer may sell to the highest bidder, although the searchers did not even know they were bidding. The best that can be hoped for is a notice that all posted deals are subject to previous sale.

    Unless you want airlines to sell by eBay style bidding,

  4. If you are intelligent and patient enough to click “select” and wait for the website to validate your selection then it is real-time. Otherwise it is you who needs to get real. No one is going to put thousands of flight-price itineraries out there for you to BROWSE in real time. They are all cached.

  5. Real time is good. Anything related to requiring personal information to custom tailor sales is a bad thing. Its just another push to sell you fares based on what they think you can afford but not the lowest available fare

  6. The standard response to anything that will change how airlines do business: “It is too difficult and will cost the passengers more.” Unless it is an idea the airline has and it will reduce staffing.

    And what is wrong with using mainframe computers? And what is wrong with software that was written 40 or even 60 years ago? Maybe they have gotten all of the bugs out by now. Mainframes have uptime standards that no Windows based server can come close to. They are also scalable in a manner that Microsoft can only dream of. I don’t know of any publicly accessible airline reservation system that requires the users to log on directly into the mainframe to do business. Everything is done through a fun graphical browser interface. Who cares what the underlying technology is as long as it provides what is needed. The cases where the airline uses cached info on its own webpages is a problem they need to fix and is their implementation of the mainframe browser connection that is broke.

    1. Actually some of the new airlines are using alternative GDS and are not on dinosaur systems. The sales matrix might be more up to date.
      Did you ever have this cannot confirm or price is not available on Southwest? I guess not.

    2. Few years ago, IBM called their new mainframe series “T-Rex”, joking with the people who still believe that mainframe are dinosaurs.

  7. This is only one aspect of booking air online. Until all flights are required to be shown, the buying public is only going to see what the carries wants them to see, so you still won’t know if that is the best fare or flights. Even with live availability, DIY’ers will still think it is bait and switch when someone else books that last seat in that fare and a different prices comes back.

  8. I think labeling mainframe technology as antiquated is not wise. Mainframes exist today because they get the job done. It sounds as if the travel industry needs to get rid of the bait and switch method of listing ticket prices before they get mandated to fix it using the strong arm of government.

  9. Dnyamic pricing is a flexible pricing system made possible by advances in computer technology,
    and employed by the airlines to maximize their profit on each flight. Using a large, historical data base, they try
    to predict with reasonable accuracy how and when seats for a particular future flight will sell. For example, if two
    months before the flight they are behind in selling the expected number of seats, the computer program will lower the cost until the actual sales catches up to
    the predicted historical sales at that time. Then the cost will immediately rise.

    This is why customers will see a price, think about it for 20 minutes, and when they return the price has changed. It’s also why on
    any given flight you can find many different ticket costs among passengers on the same flight.
    There have been all sorts of suggestions for taking advantage of this system and I don’t know if any are succesful. One piece of advice is not to book too early and possibly take advantage of a lag in expected sales so you may garner a lower priced ticket. On the other hand, if you wait too long, sales will be at the expected or exceed the expected values in the computer and you will pay a higher price. The airlines are holding all the cards.

    1. The airlines change fares multiple times a day, but something you don’t see that could cause a different fare to show up if you come back to book 20 minutes later is availability. What you priced might have been the last space available in that specific class of service and when you come back, someone else grabbed the space, so you move up in price. They also do change fare rules within the same fare basis, so what applied 20 minutes ago, no longer does now. Yes, the airlines hold the card, as it is their product, and do note that they have to file each and every fare basis so they can be researched.

      1. Bodega3 is correct; it is possible for the last available seat in a class to be sold out during the 20 minutes in my example… but I’ve experienced this when looking for a European flight on a Tuesday, eleven months in advance of the flight. That makes the “last seat” theory improbably in that case.It all has to do with load management, supply vs. expected sales vs. demand. It’s all managed by the computer program.

        1. Unless you are flying into an airport near a special event or traveling over the holidays, you shouldn’t be booking 11 months out for a variety of reason. I don’t deny that they manipulate inventory. Over spring break, AA never had any N class of service available from SFO to MIA from August to April and never would despite the fact that they actually had an N fare basis for the dates needed and routing. It isn’t all managed by computer, there is a human element involved.

          1. We vacation in the same location every year at about the same time, and use milage to buy the tickets. That’s why we look for airline tickets 11 months in advance.

          2. Mileage tickets are more controlled than others. We fly to the same location every year about the same time, too. Like you, we use our miles, usually for upgrading. We usually book our flight 8 months out and I can watch inventory. Sometimes it is a breeze to get things done and other times it is up to the last minute for them to release space. If they can sell a seat, they will hold it back. One year, not one seat in business class had been purchased for months, yet, they refused to release any for upgrading. It is a game you get to play.

  10. of course it won’t.
    More red tape means more costs & guess who pays them ? (not the airline, but the consumer)

    If hunting for sale fares, you need to be quick & have a fast internet connection.

  11. American’s ticketing process is even worse than described. Try searching for a fare, then after a few minutes, searching for the same fare again. It’s not uncommon for people to do this while putting together an itinerary. More often than not, the fare goes up the more times you search. It’s as if they know you’re looking and they’re more than happy to charge a premium for what they think is an important itinerary to you. In reality, it’s an obvious money grab.
    Another American scam is “Main Cabin Extra” seating. They charge extra money for certain seats. The problem is if you book one seat and another “free” seat opens up that you later select, or even worse, you change flights all together? What happens to the money you were charged? It’s supposed to be automatically refunded, but it never is. After I was charged “Main Cabin Extra” fees for 3 different trips that never ended up being used and the money was never refunded, I had to threaten them with a credit card chargeback before they’d actually issue the refund.

    It’s all about the bottom line, my friend.

  12. I hate this. Can you imagine the outrage if Gas Stations or Grocery Stores started doing ‘real-time pricing’? Why is it okay for airlines?

    1. because a gallon of milk only HAS one price, while the number of seats at each price point changes as seats sell out. If you didn’t like that option, we never should have de-regulated. Then we could just go back to three fares, and choose an airline on their schedules and services. But as long as CHEAP rules the day, the system we have will remain.

      1. But it goes way beyond that. Today, the price of a ticket varies based on hundreds of factors. I have seen tickets change in price based on the following:

        -Time of day
        -Browser/OS used to book
        -Number of travelers. Seriously, it was 10% less to book two tickets separately then 1 ticket for 2 people
        -How many times I have looked at the ticket already

        People would be pissed if gas stations started giving people different prices based on the car they drive, number of passengers with them and the time of day they want to fill up.

  13. This reminds me of the sneaky tactics employed (at least in the past) by American Airlines when travelers check fares on its website. On more than one occasion I went to aa.com to check a fare, left the website to check fares on other carriers, then came back within the hour to book. On my return visit, the fair was meaningfully higher. However, if I then closed my browser and cleared my aa.com cookies, then returned to aa.com, the first, lower fare magically reappeared. My conclusion is that American sees you coming. Once it knows you’re interested in a fare (which it does by storing a cookie when you request a fare) then return to the site, it figures you are interested and now willing be willing to pay more. Psychologically, it makes you think that you just blew a low fare and better book now before the fare increases yet again. In my book, this is a sleazy of sales tactic worthy of used care lots, not airlines. The result for me is that I avoid American – and just used the last of my accumulated Aadvantage/TWA miles . Perhaps other airlines use this tactic but I’ve not had the displeasure of discovering it – yet.

  14. The article’s comment on mainframes is very uninformed. Would you really want the airline reservation systems running on something like Windows? You’d have to wait for your “real-time updates” while several blue-screened servers were rebooted, and the whole mess would constantly be down.

    Mainframe computers still run the bulk of the world. They aren’t antiquated; they aren’t obsolete. They’ve grown and have been improved over the years, just like Intel and Windows. The big difference is that the mainframes have concentrated on availability and reliability. Windows has concentrated on drawing pretty screens. And, the mainframes have a 20 to 30 year head-start on experience over any of the other platforms.

    1. Great comment. Plus the fact many people don’t care to understand what a REAL TIME OS means as they are used in many embedded systems.

  15. I guess I don’t understand.
    The old mainframe system, is the real time system and is running just fine.
    The new servers are not real time and cause frustration and problems.
    Sooo, the solution is to get rid of the mainframe?

    I would think a better solution is to put the web servers on the mainframe where the data is.

    1. I do this for a living so I will let you in on the dirty little secret. The mainframe rates and inventory system is the “good” system. Those super modern distributed servers that show the B2C channel (that is you, the internet consumer) their “look” data is not real time. Why two systems? Because it costs as much to process a “look” as a “book”, and with the advent of internet shopping, 98% of transactions are looks. This throws a wrench into the business model. So the travel industry uses cheap commodity processors (Intel) and “free” software (Linux) to show you the consumer sort-of-real-time cached data and if there are customer satisfaction issues – oh well.

      Why not just get off the mainframe entirely and run rates and inventory on the “modern” systems? Because you can’t. That is not what it is designed for. Companies have tried and failed miserably. Some keep on trying and failing. That eventually costs executive management their jobs, particularly when a publicly held company has to announce a zillion dollar write off on their latest attempt to get off the mainframe. I’m looking at you Amadeus. No executive wants to do something to endanger their multi-million dollar salary, and these guys aren’t generally stupid, so they pay some lip service to “modern” systems, but run the business on the mainframe, which is the only thing that can handle the job.

  16. Actually, the airline reservation systems are not running on decades-old
    technology. Those mainframe systems are now state-of-the-art, high
    speed, scalable, secure, fully virtualized, lean-and-green “super
    computers” with more memory and faster transaction processing rates than
    any other business-oriented platform in existence. The airlines use
    z/TPF which can literally process orders of magnitude more
    Internet-based transaction volume than competing systems. And, it’s not
    just the airlines: power companies, phone companies, banks, brokers,
    insurance companies, credit card companies, oil companies, etc. all have
    powerful mainframe systems at the core of their business IT
    infrastructures, providing high-speed transaction processing, business
    intelligence, analytics, cloud, mobile and other computing technologies
    needed to succeed in today’s competitive business climate. Western
    Civilization runs on mainframe computers…

  17. The airline reservation systems are not running on decades-old technology. Those mainframe systems are now state-of-the-art, high speed, scalable, secure, fully virtualized, lean-and-green “super computers” with more memory and faster transaction processing rates than any other business-oriented platform in existence. The airlines use z/TPF which can literally process orders of magnitude more Internet-based transaction volume than competing systems. And, it’s not just the airlines: power companies, phone companies, banks, brokers, insurance companies, credit card companies, oil companies, etc. all have powerful mainframe systems at the core of their business IT infrastructures, providing high-speed transaction processing, business intelligence, analytics, cloud, mobile and other computing technologies needed to succeed in today’s competitive business climate. Western Civilization runs on mainframe computers…

  18. We don’t need to create a new standard. We just need to apply existing false advertising laws to the websites.

    I once tried to buy a single ticket at a price that a travel website said was available. However, when I tried to book the fare, I was told that that lower price ticket was not available, which made me think that I was just too slow in buying my ticket. But when I re-ran the search, the low price fare reappeared–only to disappear again when I actually tried to buy it.

    This is illegal bait and switch. If the airlines and travel sites claim that the issue exists because their ticket purchasing websites don’t use real-time data, they are actually admitting to false advertising. I look forward to a class action lawsuit being filed by some enterprising lawyer.

    1. Was the webstie telling you that the fare was available for the actual flights you were booking or that it was a fare offered based on availability? Also, how many seats did it say were available and how many were you trying to book? Also, was it showing the base fare and not the taxes plus fees, so when you got the total cost it was higher? The latter is what the DOT has rules must be advertised, which is difficult as too many factors can play into the final cost, such mulitple connects,which affects the taxes and PFC’s.

      1. I was trying to book one ticket for a fare that the website said was available for immediate purchase on the dates I requested. This was before the DOT regulations so both the price advertised and the higher price I eventually paid were both quoted pre-tax.

  19. Where does IATA promise that with its NDC there will be no chance that what Ms. Marcus experienced will not occur on this new booking platform? If AA on its own site cannot manage the display of fare inventory, how will NDC help?

    From what I see NDC is to accomodate and push ancillary costs; the extras that help the consumer experience. Yes, they say it is supposed to help consumers understand the advantage of a Delta seat over an American seat in economy, but really, don’t consumers seem to want the lowest rate?

    Also, how does NDC help a consumer decide which fare bucket in economy class is really right for them? Or will it provide that much information? Wouldn’t some consumers think that is valuable information?

    For example: How would one decide which fare bucket is best for them from Washington to Los Angeles on United?
    Take a look variety of fare combinations for economy class alone on United in this market. 28 different fares and just a partial list of the combinations Is the a value add that consumers are looking for in air pricing?

    1 UA 382Y 21AUG W IADLAX SS1 1235P 300P /DCUA /E
    2 UA 653Y 28AUG W LAXIAD SS1 105P 904P /DCUA /E

    01 YUAUP3 Y/Y USD 4961.86 393.94 5355.80 ADT
    02 YUAUP3-J Y/Y USD 4693.03 373.77 5066.80 ADT
    03 J Y/Y USD 4424.20 353.60 4777.80 ADT
    04 Y-YUAUP3 Y/Y USD 4297.68 344.12 4641.80 ADT
    05 Y-J Y/Y USD 4028.85 323.95 4352.80 ADT
    06 YUAUP3-YUA Y/Y USD 3873.49 312.31 4185.80 ADT
    07 Y Y/Y USD 3633.50 294.30 3927.80 ADT
    08 J-YUA Y/Y USD 3604.66 292.14 3896.80 ADT
    09 Y-YUA Y/Y USD 3209.31 262.49 3471.80 ADT
    10 YUA Y/Y USD 2785.12 230.68 3015.80 ADT
    11 HA7GN H/H USD 753.48 78.32 831.80 ADT
    12 LAK14QS-E* L/E USD 738.61 77.19 815.80 ADT
    13 UA7GNI-VA* U/V USD 697.67 74.13 771.80 ADT
    14 LAK14QS-E* L/E USD 681.86 72.94 754.80 ADT
    15 HA7GN-VA1* H/V USD 669.76 72.04 741.80 ADT
    16 UA7GNI-WA* U/W USD 660.46 71.34 731.80 ADT‡
    17 HA7GN-WA1* H/W USD 632.55 69.25 701.80 ADT‡
    18 VA14GN V/V USD 586.04 65.76 651.80 ADT
    19 LAK14QS-U* L/U USD 560.93 63.87 624.80 ADT
    20 VA14GN-WA* V/W USD 548.83 62.97 611.80 ADT
    21 LAK14QS-H* L/H USD 533.02 61.78 594.80 ADT
    22 WA14GN W/W USD 511.62 60.18 571.80 ADT
    23 LAK14QS-V* L/V USD 449.30 55.50 504.80 ADT
    24 LAK14QS-W* L/W USD 412.09 52.71 464.80 ADT


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