NEW YORK – Armed with mountains of data, artificial intelligence is emerging as an important tool for airlines to find the ideal fares to charge passengers, helping them squeeze out as much revenue as possible as the industry emerges from its biggest crisis.
“We are able to determine at every price point how many people will buy a ticket,” said Mr Roy Cohen, chief executive officer and co-founder of Fetcherr, whose directors include Alex Cruz, a former chief executive of British Airways. “It’s very hard to hide from a system like us.” Aviation needs all the help it can get. Travel evaporated in 2020 as governments around the world closed borders and rolled out Covid-19 restrictions. A recovery from the pandemic should drive global airline revenue to US$782 billion in 2022, still shy of the US$838 billion in 2019, according to the International Air Transport Association.
“The traditional techniques are almost blunt instruments, really, to deliver certain products at certain price points to the market,” said Ms Amanda Campbell, solutions marketing director at global travel technology provider Accelya. Datalex still leans heavily on historical information such as airline bookings and schedules to estimate current and future flight demand, Mr O’Sullivan said. But computers are increasingly weighing one-off events such as concerts and sports tournaments, as well as hotel reservations and airport queues. Changes in governments and policy, or even a ministerial ousting, can influence the market. It is the algorithm’s job to determine the relative importance of each byte.
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