Another airline is experimenting 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 impact the value of the ticket, the strategy of “dynamic pricing” is now being talked about more openly by airlines — as a minimum when it involves loyalty miles and perks.

American Airlines (AAL) recently added route demand to search out out the choice of miles it would take for a free flight through its AAdvantage loyalty program while JetBlue Airways (JBLU) added peak pricing to its rules for check-in bags (those traveling at some point of peak dates ought to pay $50 for the first checked bag versus $45).

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London-based Virgin Atlantic just became essentially the most brand new to announce a tons redemption plan that can “vary in step with demand.”

Virgin to travelers: Pricing to ‘vary in step with demand’

"Flying Club members can have the flexibleness to use Virgin Points to pay for any seat on the plane on any date, offering absolute choice and flexibility for our loyal customers," Virgin said in its announcement press free up. "The value of seats will vary in step with demand, in the same technique to traditional tickets."

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The changes, which consist of a revamp of the airline’s Flying Club loyalty program to make any seat on a Virgin flight accessible for buying with points, comes into effect on Oct. 30. For the last two years, the airline launched by Richard Branson in 1984 would reserve as a minimum 12 seats on each flight for points purchases and keep the rest open for customers paying cash.

While Virgin is positioning this as being in a position to present “a spread of our lowest ever prices in points” (with a flight between London and New York sold for 6,000 Virgin Points used as an illustration), this comes with the clarification that there'll be a “new Saver reward seat product” which allows the airline to make it subject to availability while charging higher points prices for other flights to boot as raising them on a whim if demand is high.

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Virgin says its customers ‘mean the area’ (here's what that essentially means for you)

“Our loyal Flying Club members are so important to us, and as of late’s announcement is now now not only a main for the UK, but a significant step similarly in offering them as tons choice, value and flexibility as that you may perhaps be able so that you may perhaps imagine,” Virgin Atlantic’s Chief Experience Officer Siobhan Fitzpatrick said in an announcement.

Other executives also reiterated phrases about how the changes will allow for “greater flexibility” and that Virgin’s travelers “mean the area” to the airline on the opposite hand the two words “dynamic pricing” remain the foremost essential right during essentially the most brand new announcement.

While dynamic pricing is a more brand new term for the age-old practice of raising pricing when there's likely to be high demand, airlines are now also increasing the use of artificial intelligence to assess which flights to lift both for points and regular buyers.

Delta Air Lines (DAL) CEO Ed Bastian recently gave a conference speech wherein he also mentioned how “billions of bucks of opportunity” lie right during the use of  “digital and AI” to observe pricing.

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