07 May 2015

"Personalized pricing" of airline travel questioned

Airlines may price seats based on your ZIP code, your travel habits or your marital status — a practice Sen. Al Franken on Tuesday urged the U.S. Department of Transportation to further regulate.

The federal agency last year gave the airlines permission to use “personalized pricing,” which allows the industry to charge one consumer more than another for the same seat on the same flight based on collected personal information.

The rule, supported by the airline industry and business travel groups, prohibits companies from using consumer-provided information to discriminate against consumers based on “race, creed, color, sex, religious or political affiliation, disability or national origin,” according to the federal agency.

But, it is technically legal for airlines to use other types of information to tailor prices — or in Franken’s word, discriminate — based on consumers’ income level, marital status and trip purpose.

Franken noted in his letter, signed by four other Democratic senators, that business travelers with the same flying routine could be charged more based on habit. Likewise, Franken said, people living in high-income ZIP codes may get better fares to entice them to book more tickets, over consumers living in low-income neighborhoods.

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