Airline ticket pricing in the age of AI... How will it change?

Arabian Sea Newspaper - Special

**Arab Sea_Follow-ups:** In light of airlines' efforts to recover their profits, which have sharply declined during the COVID-19 pandemic, the air travel sector is now moving towards adopting advanced technologies based on artificial intelligence as an effective means to boost its revenues. One of the most prominent expected transformations in this field is airlines planning to rely on artificial intelligence systems that help them price travel tickets accurately, allowing them to maximize their financial benefit. According to a report prepared by "Bloomberg" and reviewed by the "Sky News Arabia Economy" website, pricing programs based on artificial intelligence aim to help airlines reach the highest price a passenger can bear before refusing to book, as these programs work through a very complex pricing system, to the extent that it "exceeds the limits of human perception." **An Approach Similar to Generative AI** According to a research paper prepared by the software startup Fetcherr, which works with Delta Air Lines and many other airlines, an experimental AI program designed by the company replaces the simple pricing system currently used by airlines with a highly complex system. This program can display highly volatile prices from moment to moment, while providing a wider variety of price categories than before. This program uses an approach similar to generative AI systems, but is specifically designed to absorb complex information about markets and create pricing strategies that help airlines significantly increase revenues. Fetcherr confirmed that its smart program does not allow individual or personalized pricing and will not use or collect any personally identifiable information, noting that the program can also be used to lower prices during times of declining demand, as the new program will provide recommendations for price adjustments in both directions. **How Do AI Pricing Systems Work?** AI pricing systems work by collecting huge amounts of historical and current data, including ticket prices, occupancy rates, travel seasons, local and global events, and even weather conditions. AI then processes this information at tremendous speed, comparing it to traveler behavior patterns to produce accurate demand forecasts at every moment. Based on these forecasts, the system suggests prices that change dynamically, reflecting the expected purchasing power of customers and balancing between achieving the highest possible revenues and ensuring that seats are filled. However, the possibility of pricing each ticket separately, based on personal data, purchase history, and expected purchasing power, raises concerns about transparency and fairness. Two people may pay different prices for the same ticket or commodity at the same time, simply because the algorithm decided that one of these people "can afford more." **Unprecedented Flexibility** Hassan Al-Hajj, an expert in the tourism and travel sector, says in an interview with the "Sky News Arabia Economy" website that airlines' adoption of pricing systems based on artificial intelligence is a strategic step. This technology allows for accurate and comprehensive analysis of huge amounts of changing data, starting from daily occupancy rates, through seasonal demand movements, to the economic and social factors affecting traveler behavior. Thanks to this analysis, airlines can adjust prices more flexibly and realistically, achieving a delicate balance between filling seats and achieving maximum profitability. **Smart Discounts** Al-Hajj points out that what should be highlighted is that pricing programs that work through artificial intelligence are not only tasked with raising travel ticket prices during peak times, but will also reduce them during times of recession or low demand, or even if they find that there are empty seats that have not been sold, allowing companies to improve the occupancy rate of their flights in a way that was not previously possible. He considers that this dynamic adaptation of prices enhances the effectiveness of marketing strategies, makes the aviation sector more responsive to market fluctuations, and achieves higher revenues, especially if the program can sell seats that would have been empty if they had not been included in any discount. **Consumer Protection Controls** Al-Hajj stressed that the use of artificial intelligence in pricing is a powerful tool to support the financial sustainability of airlines and enhance their operational efficiency, but this transformation needs to establish clear regulatory frameworks to ensure the interests of all parties. Achieving a balance between profitability and protecting consumer rights requires ensuring fair prices and transparency in the standards for determining them, in addition to providing oversight mechanisms that enable travelers to object to or inquire about unjustified differences, noting that the integration of AI pricing technology in the world of aviation must be accompanied by investment in training human resources, giving them the ability to exploit the potential of this technology effectively. **A Qualitative Leap** For his part, writer and journalist Antoine Saadeh says in an interview with the "Sky News Arabia Economy" website that the development of artificial intelligence in the field of airline ticket pricing represents a qualitative leap in how airlines manage their relationships with customers and changing markets. This technology uses advanced algorithms to predict consumer behavior and analyze travel patterns in real time, allowing airlines to offer flexible prices that change according to demand. However, the ethical and legal dimensions associated with the use of artificial intelligence in pricing systems cannot be ignored, as there are legitimate concerns that price differences between customers will lead to a loss of trust, and perhaps even a feeling of injustice, especially if some feel that they are paying more than others for the same ticket and service, which calls for the adoption of strict regulatory frameworks that enhance transparency in pricing mechanisms. **An Impact That Goes Beyond Aviation** Saadeh believes that the marketing impact of this technology will not stop at the aviation sector alone, but will extend to other interconnected sectors in the global travel system, such as car rental companies and hotel chains, which can in turn benefit from AI pricing mechanisms to offer offers linked to the traveler's journey from beginning to end, noting that this integration between services allows the creation of comprehensive travel packages that combine airline tickets, accommodation, and ground transportation services at prices designed to suit the budget and interests of each customer individually. According to Saadeh, these capabilities enhance the opportunities for strategic partnerships between different service providers, where an airline can cooperate with a hotel chain or a car rental company to exchange data, allowing the design and presentation of more attractive marketing offers, and this approach can become a key tool for maximizing revenues in the world of tourism and travel.