Every time a calamity strikes, a familiar script plays out in the aviation sector — airlines are accused of charging outrageous fares. It was no different during the recent Jat agitation in Haryana. But why do air tickets become so expensive?
Some of the blame can be laid at the artificial intelligence used by airlines to price tickets. Globally, airlines use revenue management systems which look at demand on a particular flight before deciding on the ticket pricing.
As demand for seats goes up during a crisis — the Jat agitation or the Chennai floods late last year, for instance — the artificial intelligence looks at historical flight patterns, pricing and demand and sees how many seats there are, and then tells an airline whether the seats are being priced too high or too low.
“Airlines start selling the plane at a lower level so that they start filling in the base category of seats,” says Ankur Bhatia, Executive Director of the reservation distribution system at Amadeus India, a leading provider of travel software and technology solutions.
“Once they have got the flight capacity in order and everything is paid off then at the last minute they can price (the tickets) at whatever they want.”
08/03/16 Ashwini Phadnis/The Hindu Businesss Line
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Some of the blame can be laid at the artificial intelligence used by airlines to price tickets. Globally, airlines use revenue management systems which look at demand on a particular flight before deciding on the ticket pricing.
As demand for seats goes up during a crisis — the Jat agitation or the Chennai floods late last year, for instance — the artificial intelligence looks at historical flight patterns, pricing and demand and sees how many seats there are, and then tells an airline whether the seats are being priced too high or too low.
“Airlines start selling the plane at a lower level so that they start filling in the base category of seats,” says Ankur Bhatia, Executive Director of the reservation distribution system at Amadeus India, a leading provider of travel software and technology solutions.
“Once they have got the flight capacity in order and everything is paid off then at the last minute they can price (the tickets) at whatever they want.”
08/03/16 Ashwini Phadnis/The Hindu Businesss Line
