Air Canada’s recent 25% discount promotion on base fares caught the attention of Dan Pomerantz and Melanie Lyman-Abramovitch, who had booked a return flight from Montreal to Chicago just 15 hours before the announcement. Still within the free cancellation window, the couple decided to rebook to take advantage of the sale. However, to their dismay, even with the 25% discount, the new tickets turned out to be slightly more expensive than their original booking.
Air Canada defended the discrepancy, explaining that the couple had received an undisclosed 20% discount on their initial booking, not reflected on the receipt. The fluctuation in base fares due to dynamic pricing, a common industry practice where prices adjust based on demand, was cited as the reason for the price difference.
This incident serves as a cautionary example of how airfare discounts influenced by dynamic pricing can sometimes lead to higher base fares. With businesses increasingly adopting dynamic pricing to optimize profits, there are calls for greater transparency in promotions, ensuring customers can assess if the advertised discounts truly offer savings.
The rise of algorithmic pricing and dynamic pricing strategies has drawn scrutiny from Canada’s Competition Bureau, with concerns raised about the lack of transparency and understanding in pricing algorithms. The Bureau recently conducted public consultations on this trend, highlighting the challenge of comprehending and challenging pricing set by these algorithms.
Pomerantz and Lyman-Abramovitch expressed frustration at the lack of transparency in discounted airfare promotions, emphasizing the need for change in the industry. As the debate on dynamic pricing continues, there are calls for regulations to promote fairness and transparency in pricing practices.
While dynamic pricing is legally accepted, concerns persist about potential anti-competitive outcomes stemming from these practices. The Competition Bureau remains vigilant in monitoring the use of dynamic and algorithmic pricing, emphasizing the importance of ensuring competition in Canada’s market.
