Airlines considering discriminatory pricing on flights
Posted: Thursday 06 Jun 2013
A new international system of pricing could leave some customers paying more than others for the same flight - reveals MEP
Consumers should be prepared to pay more for airline tickets in the future due to a new agreement reached by the world's major airlines, which are members of the International Air Transport Association. This deal changes how flights will be priced in the future and could allow airlines to base prices on how regularly you fly, your frequent flyer participation or even the kind of trip you are taking.
In October 2012, large European-based airlines including British Airways, Lufthansa, Air-France-KL and American airlines signed up to a new system of flight pricing. This could leave some customers paying more than others for the same flight. With this new pricing system, fares will no longer be publicly available and customers would have to provide personal and sensitive data including nationality, age, marital status, travel history, shopping history and frequent flyer participation before being quoted the price of their chosen flight.
Instead of the current system, whereby fares rise and fall according to transparent factors like if it is a first or second class ticket or when the ticket is bought - this new system would take into account individual and personal factors that could end up being different to the person sitting next to you on the plane. It has the potential to completely overhaul the way customers book travel, giving airlines the opportunity to price differently for different customers including business travellers flying similar weekly routes.
Airlines have the potential to access a large amount of personal data just to be able to quote customers a price for a selected flight. Individual's data would be collected and processed before even seeing the price of a flight. This would cause serious data protection and privacy concerns for individuals. The agreement allows for a huge shift from the current customer-driven, transparent model to an anti-consumer, anti-competitive system that will disadvantage consumers.
Alarm bells have already started to ring with the European watchdog on data protection. The Working Party 29 has stated that this new agreement raises a number of privacy and human rights concerns and, in particular, those related to the profiling of individuals. This is one of the key concerns that I have already raised with the European Commission. This deal has the potential to introduce a type of price discrimination between customers and could lead to a culture of discriminatory pricing within the airline industry.
The United States Department of Transportation has the authority to prevent or stop unfair and deceptive practices but has yet to comment on the potential risks of this new strategy. Luckily, it is not only up to the US authorities - the agreement will have to be approved by the European Commission before it can be implemented in European Union territory.
The EU has historically taken a tough stand on citizen's right to data protection as we have seen with new legislation currently being negotiated in the European Parliament. Given the potential infringement to citizens personal and data protection, now would be a good time for the commission to reaffirm its commitment. It must block any new rules that would risk discriminatory practices towards consumers.
Posted by: Admin on Thursday 06 Jun 2013
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