Air France-KLM Joins Airlines Getting Ahead of Fare Wars by Mimicking Uber
Photo Credit: A view of the Eiffel Tower from an Air France plane. Air France-KLM Group said on Tuesday it would adopt continuous pricing with Accelya tech. It will calculate fares in real-time, like Uber. Adobe
Skift Take
Suddenly the phrase "continuous pricing" is on the lips of airline executives worldwide. The reason is that price competition will be fierce once international air travel rebounds. The new pricing method promises to help airlines extract the most money possible from passengers based on their willingness to pay.
For decades, most large airlines have used the same, rigid approach to pricing their tickets. But Air France-KLM and other large airline groups now want to break free of the old ways. Their goal is to price tickets as flexibly as ride-hailing apps such as Uber do.
Exhibit A: Air France-KLM said on Tuesday that it had tapped airline tech vendor Accelya to help sell its tickets in new ways. Air France-KLM said it would roll out "continuous pricing,' meaning that it plans to calculate and present its prices in close to real-time — similar to how Uber responds to changes in supply and demand when setting rates for its ride-hailing services.
What's in it for travel agents?
"Agencies will benefit from more sales," said Pieter Bootsma, chief revenue officer of Air France-KLM. Early testing showed the new pricing collected more revenue from the same amount of ticketing, Bootsma said. Air France-KLM will roll out the method worldwide by year-end.
To access the broader set of fares
