However, dynamic pricing has been criticized for its potential to increase prices, particularly for travelers with inflexible schedules. It can also lead to "implicit collusion" between firms, raising prices overall. Despite these concerns, Fetcherr recently closed a $90 million Series B funding round and plans to develop a new AI-powered "offer engine" to bundle and price multiple carrier services together. The company also plans to expand beyond the airline industry into other markets.
Key takeaways:
- The airline industry is projected to make a record revenue of $996 billion this year, but with thin margins as total expenses are expected to reach $936 billion.
- More airlines are adopting dynamic pricing tech to boost profits, despite negative consumer response. The number of carriers using this technology has increased from 220 in 2022 to 258 today.
- Fetcherr, a company providing infrastructure for dynamic pricing systems, uses AI to forecast demand and generate dynamic prices. The company recently closed a $90 million Series B funding round.
- Despite its potential to increase revenue, dynamic pricing has been criticized for its impact on consumers and potential for collusion between firms. It could also lead to airlines selling too many tickets too quickly and may face legal challenges in some countries.