The Government Wants Airlines To Explain Personalized Pricing — What It Means for Travelers

You know that feeling when you’re searching for a flight, the price goes up, and you think the airline raised it because it knows you’re interested? The Federal Trade Commission (FTC) wants to know if that’s really happening.

On October 28, the FTC ordered 9 companies to explain how they use personal data to set prices and, in some cases, how much they pay workers. The list includes 3 airlines — Delta Air Lines, United Airlines, and JetBlue Airways — as well as Uber, Lyft, DoorDash, Instacart, Target, and Walmart.

While the FTC is also inquiring into pay at rideshare companies, most consumers will wonder whether this inquiry will benefit them. Will any of this change what you pay to fly? Here’s what we know so far.

What Did the FTC Ask These Companies To Provide?

To be clear, no one has been accused of breaking the law. This also isn’t an enforcement action or a punishment.

The orders were issued under Section 6(b) of the FTC Act, which permits the agency to conduct broad studies without a specific law enforcement purpose. It’s essentially a detailed, mandatory questionnaire. Obviously, there are some questions here.

Each airline must describe any method that uses personal information to set or adjust prices, including not just software but every data input involved and what happens when data is missing. The airlines must turn over internal research and A/B tests on pricing dating back to January 1, 2021.

Moreover, they need to provide the exact wording and location of any disclosures about these practices that were made to customers. Then, the companies have 45 days to respond. If they don’t, the FTC can force a response in federal court. The Commission approved the orders by a 2-0 vote.

“Consumers deserve to know whether companies use their web surfing habits or other personal data to estimate the highest price they can charge each consumer,” said FTC Chairman Andrew N. Ferguson.

Why Loyalty Program Members Should Pay Attention

Frequent flyers should read this part carefully.

The FTC’s definition of “personal information” is extremely broad. There’s obvious stuff like your name and address, but the FTC is also including purchase history, browsing history, your interactions with past offers, income, and your perceived “willingness to pay.” The FTC’s announcement also identified rewards program participation as an area to examine.

The definition of “pricing” is equally broad.

It’s not limited to the base fare but also includes markups, discounts, and promotions. This definition could include paid upgrade offers, targeted sales sent to elite members or passengers who haven’t flown with the airline in a while, and even personalized deals within an airline’s app — though the FTC hasn’t stated that last one directly.

However, the broad language leaves room for that, and paid upgrade offers are exactly where many travelers feel like pricing varies from person to person. It’s also worth pointing out that the order asks each company how it prioritizes customer requests. For an airline, that could possibly include upgrade lists or standby priority.

What This Will (and Won’t) Mean for Travelers

Nothing is changing right away. Fares won’t change solely because of this inquiry, and the airlines have more than a month to reply. The inquiry is unlikely to produce any major drama.

Confidential business information gathered in this study will be reported anonymously through aggregated data. Even if the FTC finds something odd, the final report is unlikely to say you were charged more by an airline because you do or don’t have elite status.

The more important piece is a separate proposal.

Back in August, the FTC released a draft enforcement policy statement on personalized pricing, accepting public comments until September 18. Here, Ferguson acknowledged that the FTC doesn’t have the legal authority to ban personalized pricing in all circumstances. Instead, his argument is that businesses that hide how they use personal data to set prices could be in violation of the FTC Act.

All of this together means the most realistic outcome from this inquiry isn’t cheaper flights. It’s more disclosure — probably buried in the fine print at the bottom of a flight search page, saying how the airline uses your personal data and how that affects the price you see.

Airline pricing is already dynamic, and that’s not the same thing as personalized pricing. Prices change based on demand, how far ahead you book, proximity to holidays, fare class availability, and what competitors are charging. That’s frustrating, but it doesn’t mean the airline is charging you more because of who you are.

Add-ons and targeted offers are a different story. The FTC could find something here that’s worth taking action on. Regardless of the outcome, getting airlines to explain their pricing methods on the record is a good thing. Right now, travelers only have suspicions, and an informed public is a net positive.

What You Can Do Now

You don’t need to wait for action from the FTC to protect yourself. Here are steps you can take:

• Compare prices before and after logging in to your loyalty account to see if that has an impact.
• Use a private browsing window or incognito mode. The FTC mentions private browsing and VPNs as steps informed consumers might take.
• Check prices on multiple devices. Use your phone, computer, multiple browsers, and even your tablet to see how pricing varies.
• Don’t assume an upgrade offer as final. Check the price again later during the booking process or closer to departure to see if it’s changed.

Keep in mind that a price difference doesn’t automatically mean it’s being personalized. Fares can change within minutes when a cheaper fare class sells out or when someone else accepts an offer, creating seat scarcity in business class.

Final Thoughts

The FTC’s 2024 study on personalized pricing only looked at consulting firms that sell pricing tools. This time, the agency is going straight to 3 airlines — Delta, United, and JetBlue — to understand how they set prices.

Unfortunately, this is unlikely to make your next flight cheaper. However, it might lead to clearer rules on what airlines must tell you about how they use your data to shape prices and offers. For travelers who have long felt this was happening, finally getting an answer on the record could be nice.