Another airline experiments with ‘dynamic pricing’

While anyone who has ever tried to book a flight at the last minute has also had a chance to see how demand will affect the cost of the ticket, the “dynamic pricing” strategy is now being discussed more openly by airlines – at least when it comes to loyalty miles and advantages.

American Airlines (AAL) recently added the route request to determine the number of miles it will take for a free flight through its AAdvantage loyalty program, while JetBlue Airways (JBLU) added peak pricing to its checked bag rules (those traveling during peak periods must pay $50 for their first checked bag instead of $45).

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London-based Virgin Atlantic has just become the latest to announce a miles redemption plan that “will vary based on demand.”

Virgin for travellers: prices ‘will vary based on demand’

“Flying Club members will be able to use Virgin Points to pay for any seat on the plane on any date, offering absolute choice and flexibility to our loyal customers,” Virgin said in its press release. “The price of seats will vary based on demand, in a similar way to standard tickets.”

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The changes, which include a revamp of the airline’s Flying Club loyalty program to make any seat on a Virgin flight available for purchase with points, come into effect on October 30. For the past two years, the airline launched by Richard Branson in 1984 would reserve at least 12 seats on each flight for points purchases and keep the rest open to customers paying cash.

While Virgin positions this as being able to offer “some of the lowest points prices” (with a flight between London and New York sold for 6,000 Virgin points being used as an example), this comes with the clarification that it will there was a “New Saver Reward Seat Product” that allows the airline to make it based on availability, while charging higher points prices for other flights, as well as increasing them on a whim if demand is high .

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Virgin says its customers ‘mean the world’ (here’s what that actually means to you)

“Our loyal Flying Club members are so important to us and today’s announcement is not only a first for the UK, but also a significant step further in giving them even more choice, value and flexibility,” he said Siobhan Fitzpatrick, Virgin Atlantic’s Chief Experience Officer. said in a statement.

Other executives also reiterated phrases about how the changes will allow “greater flexibility” and that Virgin travelers “mean the world” to the airline, but the two words “dynamic pricing” remain the most prominent in the latest announcement.

While dynamic pricing is a more modern term for the age-old practice of raising prices when there is high demand, airlines are now and increasingly using artificial intelligence to judge which flights to raise for both points and and for ordinary buyers.

Delta Air Lines (DAL) CEO Ed Bastian recently gave a conference speech where he also mentioned how “billions of dollars of opportunity” lie in using “digital and AI” to monitor prices.

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