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Old 10th February 2012 | 12:01
  #29 (permalink)  
TJW
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I think the pricing policies of airlines and utilities are related phenomena, but not quite the same. In both cases, what used to be simple pricing rules have been replaced by byzantine schemes in order to maximise revenue.

With utilities, I agree that one of their goals seems to be to make comparisons of different tariffs as difficult as possible by altering the T&Cs ever so often. The price that is quoted up-front seems to be stable over time, but it's near impossible to work out what you'll pay in the end unless you chose an "all-inclusive" option. So the moving target here are the T&Cs.

It's different with airline ticket pricing. Here, the moving target are the ticket costs, not the T&Cs (unless you consider cases as Ryanair, where new chargeable extras are introduced every so often). The revenue management systems are designed to extract as much money as possible while still making the sale. Request for single seat coming in during office hours? Must be business traveller, so quote higher price. Request for adults+children during evening? Family, so quote lower price, unless system still expects to sell seats at higher price to business travellers, or it's late booking, or some of the myriad other rules applies.

As someone working in planning&optimization, I find these problems and the question of how to solve them algorithmically highly interesting. As a customer, I find it highly annoying, and agree that it just drives you mad trying to hunt down the best bargain. Similar to driving across town to buy milk that is fractionally cheaper. Also, and in my opinion most importantly, training your customers to be bargain hunters does not make them loyal customers.
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