Last night, my wife and I made the decision to book flights for an upcoming trip. We have a long-standing loyalty to United Airlines, having earned significant status over the years. On occasion, we opt to book our flights separately, each of us paying for our own ticket, yet flying on identical routes. What transpired during this booking process was both startling and infuriating, shedding light on the complex algorithms that govern airline pricing.

Understanding Dynamic Pricing

It's no secret that airlines employ dynamic pricing strategies, which I assume are primarily influenced by supply and demand, as well as timing. There have also been whispers that your geographical location at the time of booking can impact the price you're offered. For instance, it's rumored that individuals booking from Europe may receive more favorable rates for domestic U.S. flights than those booking from within the United States. While I had always been somewhat skeptical of this claim, my recent experience has made me a firm believer.

I am now convinced that airlines are not only leveraging location as a factor for dynamic pricing, but also a multitude of other factors that define you as a person and consumer. This is akin to Instagram suggesting a sweatshirt that complements the t-shirt you just purchased (prior purchase history), or a San Francisco-based startup CEO being targeted with ads for private jet travel (work and income). In the case of airlines, they may also be using data such as your travel frequency, preferred destinations, family size, and more to tailor your pricing.

A Real-Life Example

Here's what unfolded last night that solidified my belief in this theory. My wife suggested we book our flights for a trip we have planned next month. She quickly found a round-trip fare for $288 and proceeded to book her ticket. While sitting next to her, I searched for the same flights, on the same days, and with the same tier of frequent flyer status. Astonishingly, my fare came out to be $222—a 23% discount compared to my wife's rate.

But the story doesn't end there. I soon realized that I had inadvertently used my work credit card for the booking. Upon contacting customer service via the mobile app's live chat feature, I was informed that the payment method couldn't be changed; I would have to cancel and rebook. Within a mere 10 minutes of my initial booking, I found that the price had escalated to $241—a 9% increase.

The Implications

We were quoted three different prices for the exact same flight, all within a span of 10 minutes, and under identical conditions—Same wifi, same type of device, same app, no VPN. While these fluctuations may not significantly impact our wallets, consider a 23% price difference on an international flight costing $2,000; one traveler could end up paying $460 more than another.

I have a few other trips that I still need to book, so I intend to further investigate this phenomenon by experimenting with various booking conditions, such as using a VPN, logging in and out of the United app, and employing incognito mode. I will share my findings in a subsequent post. I can’t wait to see what happens.

Is This Legal?

This experience raises questions about the legality of such pricing strategies. Is it lawful to charge different prices for the same service based on factors like income, employment, or IP address? It probably is legal in the US, but it certainly is concerning. As a consumer, I prefer price transparency and equal treatment. Sure, price based on supply/demand, but charge me the same as you charge my neighbor. That’s what I get when I go to a restaurant, buy electronics, or purchase a ticket to a concert. I don’t think it is too much to ask for from an airline.