The airline industry has some very specific characteristics that drive its commercial and operational practices. In some respects it is highly regulated and in others it is “regulated” by public opinion and expectations. It is also somewhat constrained by its complex network of legacy IT and communications systems. Against that background airlines and their technology providers are moving to modernise commercial processes to optimise the revenue they can realise from a relatively fixed stock of flight seats. Dynamic pricing is one approach that promises significant revenue improvements.
This paper surveys the current landscape for airline dynamic pricing. It identifies progress to date and the challenges that must be overcome for airlines to realise the available benefits.