Given that its Elevate conference last week attracted approximately 400 aviation, technology and intermediary professionals, it's no surprise that ATPCO used the occasion for a few announcements.
What is surprising is that their potential impact hasn't received the attention it probably warrants.
Airlines file fares with ATPCO (the Airline Tariff Publishing Company) which then feeds them into the GDSs. It claims to provide more than 87% of fare data to global distribution systems, online travel agencies, etc as well as related content such as ancillaries.
At the end of September, right before the conference itself, ATPCO announced that it and Perfect Price would be launching a system of dynamic pricing for ancillaries. They plan to use "technology to understand the elasticity for individual ancillary products and bundles, and to predict unique demand curves for each segment. This means better availability and more revenue for airlines."
At ATPCO's Elevate conference itself it went another step beyond ancillaries and "announced it has enhanced its model for dynamic pricing, now enabling airlines to complement their standard pricing (pre-filed fares) with a new, tested dynamic pricing model. The new approaches will significantly increase the speed at which airlines can get more price points out to the market, including personalised pricing to consumers."
Like NDC anything which eases booking and enhances the ability to upsell at the point of sale is manna for the carriers but unlike NDC, one more item has slipped into the package which could signal both joy and despair for travel buyers..."personalised pricing".
Dynamic pricing will be a revolution enough — fares will no longer be pre-loaded but instead there will be a system of preset bands of maximum and minimum fares within which the price will be changing continuously according to demand.
But personalisation, offering different fares to different buyers at different times, has the potential to be both a benefit and a bane for buyers.
Personalisation could make searching and booking even easier for there would be immediate recognition and default to any corporate deal or TMC negotiated fare rather than the published fare on the carrier's own website.
On the other hand, it also brings recognition of how much — to use ATPCO's vocabulary — 'elasticity' there might be in each individual search and therefore produce a punitive fare for specific bookers.
'Elasticity' is the economist's term to describe how much flexibility there is in the demand for a specific product or service. Demand for food and fuel is inelastic because we need it to live whereas demand for a restaurant meal is more elastic because it is not essential and there are options. A student who is looking for a cheap fare to Bangkok for a backpack break doesn't need to travel at a specific time. In contrast a business traveller who needs to be at a scheduled meeting has inelastic demand. Moreover, time is money — a business traveller is unlikely to be willing to wait six hours in a departure terminal for the cheaper 11pm departure.
A revolution in distribution is underway. But, like all revolutions, it is best to understand all the component elements and possible outcomes rather than merely noting the top line message.