Dynamic Pricing, Shopping Data Set To Revolutionise The Airline Industry

With the ability to capture and act on shifting demand patterns before bookings are made, shopping data unlocks the potential for continuous pricing strategies that are far more responsive and customer-centric. As IATA pushes for smarter, data-driven pricing ecosystems in 2025, the industry’s transformation will depend not on more rules, but on real-time intelligence and the courage to let go of legacy constraints

Dynamic pricing is a technique of pricing a product according to current market conditions. Prices change in real time based on timely data: Data about customer booking patterns, competitor prices, even weather and popular events can impact the product demand and require you to adjust prices to increase profits.

Airlines have started to focus on expanding their product offerings beyond flights to include ancillary products (e.g., baggage, advance seat reservations, meals, flexibility options), as well as third-party content (e.g., parking and insurance). Today, however, offer creation is rudimentary, managed in separate processes, organizations, and IT systems

As we’ve entered 2025, the airline industry is on the verge of a long-anticipated revolution in retailing - finally moving towards a truly data-driven, dynamic offer model that could redefine how flights and ancillaries are priced on airline websites.

On the one hand, dynamic pricing has seen widespread adoption and steady growth in the airline industry. Today, approximately 260 carriers worldwide - roughly 80 per cent of all IATA member airlines - apply some form of dynamic pricing technique, marking a 20 per cent increase from just two years ago. These pricing strategies allow airlines to adjust fares based on booking demand, typically increasing prices as seats fill up for a particular flight.

Many airlines still rely on simple rules-based systems that primarily adjust prices according to seat availability or booking timelines. For instance, fares might automatically increase as specific inventory thresholds are met or as the departure date approaches.

More forward-thinking airlines are beginning to leverage a much wider range of variables. These may include external factors, such as weather forecasts, economic trends, and competitor pricing from APIs and the web (e.g., via OAG’s Airfares data), alongside internal considerations like historical booking patterns and ancillary revenue opportunities.

The most advanced state of dynamic pricing, often referred to as continuous pricing, is rarely achieved (yet). This level of sophistication becomes possible only through the integration of Shopping Data. For example, Shopping Data enables airlines to adjust pricing based on aggregated consumer behavior observed across other airlines’ websites, including more nuanced airfares generated during the website journey. Here, demand is no longer inferred from historical booking data - it’s informed by real-time behavioural insights.

Given these statistics, it’s no surprise that IATA acknowledges that, for the most part, airlines are still relying on legacy breakthroughs from past decades to price today’s flights and ancillary products.

This reliance on legacy pricing structures is precisely what has held back the full potential of dynamic offers. While airlines have made strides toward more flexible pricing, true real-time responsiveness remains out of reach for most.

At the heart of this evolution lies Shopping Data - real-time data organically generated by passengers through flight searches (demand component) and the corresponding airfares and ancillary pricing displayed to them on airline and OTA websites (pricing component). For the first time, this industry-wide Shopping Data is now available to individual airlines, providing unprecedented visibility into live search patterns and price fluctuations beyond their own platforms.

By leveraging these insights, airlines can go beyond “conventional” dynamic pricing, enabling truly continuous offers that adapt to real-time market conditions, incorporating both competitor pricing and shifting demand.

The true potential of airline retailing lies in breaking free from legacy constraints—and Shopping Data offers one of the keys to this transformation.

Shopping Data provides airlines with richer, real-time insights into demand as it evolves during the shopping phase. Unlike static booking data, which only reflects completed transactions, Shopping Data captures live search activity, offering a more immediate and accurate picture of market demand. By tracking which routes, dates, and fare types are being searched most frequently, airlines gain a real-time view of shifting demand patterns.

With this expanded real-time demand visibility, airlines can: Adjust pricing dynamically based on live demand shifts rather than waiting for historical booking data. Respond to spikes or dips in interest in near real-time, ensuring fares better align with market demand as it happens.

Traditionally, airline revenue managers have relied on competitor pricing data accessed via API integrations with airline websites, a key offering provided by OAG that ensures reliable and accurate fare intelligence. This trusted approach gives airlines direct access to multiple price points per day—providing a distinct competitive edge over providers relying mainly on web scraping.

In 2025, IATA is collaborating to reduce complexity, enhance transparency, and optimize the customer experience. This year the focus is clear: help the airline industry get the data it needs, understand it at a deeper level, and action it with greater agility and precision.