Did an airline post accidentally expose the dirty secret of airfare pricing?

April 27, 2026 — 5:00am

Imagine you’re sitting in an economy class seat in the middle of a row of three seats with a stranger on either side. Such is the segmentation of air ticket pricing these days, it’s likely all three of you paid a different price for a seat, and you just might have the nagging thought that one of them might have paid less than you did.

Why does that happen? Maybe you paid more because you live in a posh postcode? Or was it because you logged into the airline website a couple of times before hitting the “book” button? If that’s the case, it’s what’s known as surveillance pricing, setting a price on a commodity tailored for a specific client.

Do airlines use surveillance pricing?

Surveillance pricing is the practice of charging customers different prices based on location, age, gender and spending patterns. It might also take account of the number of times someone has logged in to a particular website seeking the same product or airfare.

While it might be tempting to believe a retiree logging in from an inner-city Melbourne address who is returning to the same website for the third time is going to be charged more for an air ticket than a 30-something in an outer suburb for the same ticket, bought on their first visit to the website, the evidence does not support that.

Earlier this month, there was a social media firestorm after US budget carrier JetBlue was accused of using surveillance pricing.

The conflagration began when an X user posted “I love flying @JetBlue but a $230 increase on a ticket after one day is crazy. I’m just trying to make it to a funeral.”

A JetBlue representative responded saying: “Try clearing your cache and cookies or booking with an incognito window.”

The airline’s response was seen as an admission that it might have known the customer was caught in a bind and that it used that information to inflate the price. JetBlue beat a hasty retreat, telling tech website Gizmodo the reply was incorrect and that it does not use surveillance pricing and apologising for the error.

The legal question of surveillance pricing

Legally, surveillance pricing is a grey area. Businesses can adjust prices according to demand and inventory. In general, they can also charge different prices to different customers for the same product or service. Student discounts and senior fares or promotional discounts are just a few examples. What they can’t do is set a price based on where someone lives, their income or their shopping habits.

However, that’s not to say it doesn’t happen. Consumer protection authorities in some countries are on the case. The EU leads the way with its Omnibus Directive, which requires traders and marketplace platforms to “inform if the price presented is personalised on the basis of automated decision-making and profiling”. In the US, the Federal Trade Commission launched a formal investigation into surveillance pricing practices by major retailers and data brokers, putting the spotlight on how companies such as Mastercard sell pricing intelligence tools built on consumer data. Australian consumer law prohibits misleading conduct, and the ACCC has flagged personalised pricing as an area of concern, but there’s no specific regulation.

But while airlines don’t use surveillance pricing, it can feel like they do. In a common scenario, you search a flight, see a low fare, you come back later and it’s gone. You might assume the airline recognised your interest and hiked the price. But the reason the price has increased is all the seats you saw in the lower price category – “price buckets” in airline parlance – were sold out. That’s an example of dynamic pricing.

Dynamic pricing

Airlines use revenue management software that constantly adjusts prices to maximise revenue on every flight. That’s dynamic pricing, and it’s standard across the industry. The goal is to fill every seat at the highest price each passenger is willing to pay.

The single most important factor that determines the price for an airline ticket is demand. Airlines analyse historical booking patterns, seasonal trends, events in the destination city, day of the week and time of day to predict how full a flight will be. High-demand flights get higher prices, low-demand flights are discounted to fill seats.

Booking curves are another factor. Airlines expect different types of travellers to book at different times. Leisure travellers book weeks or months ahead; and business travellers often make a last-minute booking. Based on historic booking patterns, airlines allocate a block of their most expensive seats for those late bookers.

Taking all the data at its fingertips, the revenue management software divides the seats available on a particular flight into fare classes, or buckets, each with its own price and conditions. As tickets in the cheaper buckets sell out, travellers are left with the more expensive options. Flights on the same route at different times of day will often have different bucket configurations. A commuter flight used primarily by business travellers will have a different set of buckets from a midday flight with mostly leisure travellers on board.

Many hotels also use dynamic pricing to squeeze maximum revenue from their inventory. The concept has also been used for major concerts in Australia (though the federal government has promised to ban the practice).

Last year FIFA, world soccer’s governing body, adopted dynamic pricing for tickets sold through its online portal. This has caused ticket prices for the 2026 World Cup to be held in North America and Central America to skyrocket. At the beginning of April, FIFA was selling its Category 1 tickets for the World Cup final for almost $US11,000 ($15,420). The cheapest Category 3 final tickets are $US6000. If you plan on attending some of the World Cup games and you haven’t already locked in airfare, accommodation and tickets, the dynamic pricing model is going to bite hard.