Slippery pricing - Delta isn't the only one

Slippery pricing - Delta isn't the only one

Summary: Flyers have experienced slippery pricing on many airlines, not just Delta. Readers have found that the price can change mid-transaction on many other airlines. Why is this allowed?

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TOPICS: Travel Tech
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In a recent post, Delta Airlines and slippery pricing, I discussed an experience I had with Delta's website. I was trying to get home because there was a death in the family. While trying to purchase tickets home, I found that Delta's site offered "slippery pricing." That is the price advertised on the website changed in the middle of the transaction. Before I was allowed to check out, I was informed that the price had increased by roughly a third. This happened three different times when I tried to select routing through three different hub cities with three different departure times.

Surprise! Other airlines do this too!

Boy, the feedback I've been getting has been amazing. It appears that Delta isn't the only airline practicing "slippery pricing" on their website. Customers of AirTran, U.S. Airways, and United have also experienced the same thing.

Several readers described terrible customer customer service and "aggressive pricing strategies" when they were trying to get home for a funeral or to the hospital in a remote city when a loved one was on death's bed.

Delta called

A representative of Delta's CEO's office called after reading my previous post and discussed what the company is doing to learn how I experienced this type of pricing change mid-transaction. I was informed that Delta is tracking all user transactions and can examine what customers entered, the state of the flight databases at the time and see why their website displayed the results. They hope to better understand what actually happened during my attempts to purchase tickets to go home for the funeral.

I'll not try to describe the conversation word-for-word, but I will try to summarize my understanding of what was discussed.

Airline response to economic pressure

Delta, like all airlines, is facing high costs for fuel, equipment, fees and staff. It has turned to a number of strategies to earn a profit when selling their limited product — airline seats. Although not a topic of the discussion, some of the ways airlines, including delta, have used to increase revenues in this difficult environment include:

  1. Adding charges for things previously included in the fare — things such as meals, fees to transport luggage, fees for things such as blankets and pillows
  2. Encouraging customers to sign up for partner credit cards by offering to waive certain fees for cardholders. I suspect that the airlines are being paid a fee or commission by the credit card company for each individual they refer
  3. Segmenting seats into different categories and charging a premium for "more desirable" seats, such as seats close to the front of the aircraft and exit-row seats. The airlines have also changed the seat pitch, or distance between seats, in certain parts of the cabin so a premium can be charged for increased legroom.

My take on what happened

I believe that my experience is related to reason number 3 listed above. Since each flight has only so many seats, the seats are segmented in different pricing categories, and a whole host of people and systems are purchasing seats, it is possible that a category of seating was available at the beginning of a transaction and was sold before a customer could finish the transaction.

Rather than honoring the initial price, airlines just display a screen prior to checkout offering a seat in another category, a category that costs more than what was displayed originally.

Analysis

While I can certainly understand what happened, I don't have to agree with it. If we use an analogy, it would be a like a grocery posting a price for an item, say a cabbage, and then surprising customers with a price increase at the checkout counter because all of the cabbages in one part of the bin had been sold and cabbages in another part of the bin were assigned a higher price.

Airlines really do a poor job of letting customers know about how seats have been categorized and the prices they've set for each category. A price is displayed for "a seat" and if all of the seats in that category have been sold before the customer can check out, the airlines demand a higher price.

It would seem to me that once an airline has posted a price for a seat, that price should be honored at the end of the transaction.

What's your take on this?

Topic: Travel Tech

About

Daniel Kusnetzky, a reformed software engineer and product manager, founded Kusnetzky Group LLC in 2006. He's literally written the book on virtualization and often comments on cloud computing, mobility and systems software. In his spare time, he's also the managing partner of Lux Sonus LLC, an investment firm.

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Talkback

15 comments
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  • one word

    Fraud!

    A quoted price must be honored, period. All online vendors (no airlines) I deal with honor their quoted price or a lower price. If you quote me a price of $50 plus tax and fees your final check must itemize the taxes and fees so people can understand final charge.

    The airlines must honor their quoted prices with no excuses. The problem is they have an idiotic pricing system that is geared to defraud customers.
    Linux_Lurker
  • Simple Solution

    Don't fly. I have not flown personally since 2007. Business, yes as they are footing the bill. But personally, we find it cheaper and more relaxing to drive. Yes, it takes longer but after airfare, time to get through the airport BS, fees (including baggage), etc, it's often cheaper to drive.

    Now for the OP, the funeral may make it hard or impossible not to fly but those are the exception.
    itguy10
    • Sure, but ......

      that only really applies to short flights. If you want to travel coast to coast or from Boston to Miami, driving is not a realistic alternative for most travelers.
      D.T.Long
    • It's really hard to drive to Europe.

      Not to mention up here in Canada, cities are often hundreds of kilometers apart, if not over a thousand. Driving simply isn't practical. Neither are trains, which tend to be very slow and a lot more expensive than planes.
      TheWerewolf
    • Business requires ability to quickly go where the business is

      Unfortunately, I don't have the ability to refuse to use airlines. Business often takes me to events or customers that are far enough away that driving is impractical or impossible. So, "just say no" isn't a strategy that I can use.

      Dan K
      dkusnetzky
    • I'm planning a trip to England...

      What's the best driving route from the northeast?
      msalzberg
      • Simple (almost)

        The Bering Strait and the English Channel are the only two minor obstacles.

        Give it a shot.
        D.T.Long
  • Disagree with your assessment

    I think the airlines are trying to capture ALL the value under the demand curve to maximize their revenue. That is technically VERY difficult to achieve, and results in the situations you describe.

    If you watch how prices are constantly changing for no frills budget airline seats, sometimes even on an hourly basis, you may see some evidence for this.

    It does make a lot of economic sense, but they end up pi$$ing off a lot of (potential) customers.
    D.T.Long
    • I think you're missing his point...

      He's not saying it's wrong for an airline to maximize profit overall - but once a transaction has started, the price quoted shouldn't change. It's analogous to buy a book at a sticker price, and finding out that they've increased the price 30% at the checkout. It renders the sticker price meaningless.

      In fact, it would be illegal to do that in a store - most places have laws that essentially say 'if you offer a product at a specific price, you have to honor that price at the till'. Not doing that is fraud. And that's his complaint with the airlines. They're offering a ticket at a given price, which you've accepted - but when you go to pay for it, the actual price is *different*.

      That's not a valid business model and might even be illegal.
      TheWerewolf
      • I am not condoning it ....

        nor commenting on the legality. I was only attempting to explain what I think the airlines are trying to do, which is the holy grail for every business, and impossible to achieve when you have to price every sale at the "last sale margin price".

        What makes sense economically is not necessarily technically feasible, legal nor advisable from a marketing and customer relations perspective.

        It may make a lot of sense economically to deal in illegal drugs. Most people choose not to for a variety of reasons.
        D.T.Long
      • For how long?

        Once you pull up a price for a seat, how long must they honor it? 1 minute? 10 minutes? 1 hour? 1 day?
        raleighthings
  • Bait and Switch

    Plain and simple.

    In a store system, once you pick an item, that item enters a 'cart' and the available inventory decreases by one. The item is held until either the transaction is completed (where it inventory drops by one) or is abandoned (time out, cart empty, log off, etc.) No, putting it in "save for later" doesn't save the item or its price (have used Amazon enough to know that). And there is a timeout. If I exit without logging off and come back later and go back to my cart, the first time I do the status of everything updates.

    Why don't airlines use this - simple, they don't have to (or haven't been dragged into court over it). Apparently you can pick a seat on a flight and it can be sold right out from under you using that logic. And guess what, bet that happens more if you pick a cheaper one and then go to check out. "Oh, wait, we have this one, but it will cost you more!" They figure most people if they get to the end of the transaction really need to fly, so they will choose the option and pay the difference and go on. If they bail, no harm, no foul, there's another sucker out there. Also for businesses, they have arrangements with travel agents and airlines, so they get their flight, not realizing they could have had it cheaper, but got ripped off.

    Where's the FTC when you need them? Didn't retailers get nailed for this crap a long time ago???
    jwspicer
  • Southwest culprit too

    While planning a trip for the Christmas season, the same scenario happened with me on the Southwest website. Trying to look at the cheapest price for different days, they actually went up after refreshing the webpage. Or mid way while checking out the price has some how gone up. Tried it the next day and prices were back to the normal price.

    I called their customer service on this and they gave me the spill about being very busy, yet seats were still available on those flights.
    RIAAsucks
  • ALL airlines sell seats this way

    All of them. And to be honest they'd likely like to get to a more rational and understandable way of doing it. But as long as one of them gets to do it they all have to do it to be competitive.
    raleighthings
  • They would not MAKE you pay extra for Economy Comfort or Priority Seats

    That would not be the reason why a fare would increase. If all that is left on a flight is premium seating, Delta has a system that allows you the option to not choose to pay extra. You are put on a list and then given a seat at the gate. If a flight is close to being full, then there may only be the more expensive fares left. Much of the pricing system advertised shows a base fare which does not include taxes, etc. It is not about specific seating. The airline can confirm that.
    Nola1701