The world of airfare is changing before our eyes. Airlines have jacked up the price of one-way flights and targeted solo passengers with higher fares, too. And, more troublingly, carriers like Delta (and others) are now leaning on AI to set airfare … raising the prospect of personalized pricing. What does it all mean? Kyle and Gunnar break it all down on this week’s episode, telling you how airfare is changing, why, and who’s responsible. Plus, why this is your year to go to Costa Rica … and the airline that both Kyle and Gunnar are embarrassed to have never flown before.
The world of airfare is changing before our eyes. Airlines have jacked up the price of one-way flights and targeted solo passengers with higher fares, too. And, more troublingly, carriers like Delta (and others) are now leaning on AI to set airfare … raising the prospect of personalized pricing. What does it all mean? Kyle and Gunnar break it all down on this week’s episode, telling you how airfare is changing, why, and who’s responsible. Plus, why this is your year to go to Costa Rica … and the airline that both Kyle and Gunnar are embarrassed to have never flown before.
00:00 - Did AI write this intro?
01:08 - Should we be worried about AI-fueled airfare?
02:43 - Want to go to Costa Rica? Go this year (while deals are white hot)
06:25 - The surprising return of one-way airfare penalties
11:45 - Stay current on the news: Subscribe (for free!) to The Daily Beat email newsletter
13:00 - As AI enters airfare, how does airfare actually work right now?
19:30 - By penalizing one-way travelers and solo travelers, the airlines are shifting strategies…
22:25 - How Delta (& others) are actually starting to use AI to price flights
27:00 - What is Fetcherr? What they’re doing for Delta - and the article they didn’t want you to see
34:40 - What can we do to protect ourselves from AI? Are there any guardrails out there?
41:20 - Listener Question: Done with the Chase Sapphire Reserve card? What to pick up next?
46:10 - On the spot: What airlines have you not flown?
Produced by Gunnar Olson & Jackson Newman
Edited by David Strutt
Show music: “All That” by Benjamin Tissot
Yo. Welcome to the show. I'm Gunnar Olson, and today's guest is a man who can smell a mistake fare from a mile away. He's the executive editor at Thrifty Traveler, your favorite travel hacker's favorite travel hacker. And when he's not tracking down cheap flights, he's busy being outsmarted by his Corgi Mikka, who frankly might have stronger opinions on airline loyalty programs than most humans.
It's Kyle Potter. Kyle, welcome. What does a mistake fare smell like? Because I'm I would like to think I can smell them, but I don't know that I could really put my finger on exactly what they smell like. I have no idea.
I have no idea. But the first thing I need to know is Jet fuel and Biscoff cookies. That's what I'm going with. Oh, it must be. It must be.
Alright. Alright. The first thing I need to find out from you today, Kyle, is could you tell that AI wrote that intro? No. No.
It that seemed more in line with your usual, peppery intro. So no. Well done, AI. Good. Yeah.
Very or I'm a very robotic writer. One of the two. We don't know. No comment. Alright.
I have an actual find something out today. Airlines are starting to lean really hard into AI, to set airfare. So I guess how much of what we're paying now is being decided by these kinda AI algorithms, and, you know, should we be worried about it? Yeah. I think we absolutely should.
I think everybody is really right to question the headlines that we've seen from Delta recently that we're gonna talk a lot about on this show. But I would just, you know, caution you, caution everyone. This is bigger than just AI that we're talking about. Kind of what we're talking about is a real wholesale reimagining of how airlines set flight prices, and using AI to kind of be the engine of how they do that. So moving away from the fare classes and inventory that we'll get into later that are really so important, but in many ways pretty outdated in the way that flights are priced today and moving towards truly continuous dynamic and personalized, most troublingly, pricing with flight prices.
That's that's what has, I think, all of us in the office a little bit concerned about what that means for the future of airfare and for doing what we do, which is find great deals. Yeah. We're gonna talk all about that. But, today on the show, we're gonna talk first about a destination where the deals have been really hot lately. We're gonna talk about a troubling new trend in airfare.
And, of course, we're gonna dive into the past, present, and future of airfare, most importantly, touching on this kinda next generation of AI fueled fares and personalized fares that are gonna change the way that we all book flights. All that and more. Welcome back to the Thrift Traveler podcast. Alright. Let's jump into something hot and cold where we look at the good and the bad news out there from the last week in travel.
And as always, we're gonna start with something hot. Kyle, over the past few weeks, we've seen a flurry of incredible flight deals to Costa Rica. I'm talking about rates all over The US, round trip airfare under 400, sometimes even under 300 round trip. And then on top of that, we've paired those some of those alerts we've sent to our Thrifty Traveler premium members with some hotel alerts as well. We've seen, the Waldorf Astoria, bookable with Hilton points.
That's a place that could easily run you up to $1,500 or more a night just for their lowest level room. And then, a little bit before that, the Andaz Papagayo bookable with, World of Hyatt points. Another property that looks really, really cool and really fun are I know our colleague, Tracy Burch, is heading down there this winter. But, are people just not going to Costa Rica? Why are deals so good there right now?
This seems like a new thing. You know, we've talked, around and around this topic so many times. I just don't think it's that travel has stopped. It's that travel demand growth has finally started to slow down and isn't keeping pace with the supply of flights and new hotel rooms. So just before we hopped on the pod here, I looked it up in Cerium, the aviation analytics company.
The number of seats flying from The United States to Costa Rica and back is up 55% this winter compared to the winter of twenty nineteen. So that works for a while, but, you know, once travel demand starts to plateau and there still are more planes flying there than there were, you know, last year, five years ago, six years ago, At a certain point, the airlines just start struggling to fill seats, and I think that's probably what we're seeing now. It's really what we're seeing. In particular, the Europe is the big one that we've talked about, but we're seeing this similar script start to play out, you know, really across the globe. Yeah.
That is a that's a massive uptick in capacity. I think, we've seen you know, the deals that we've sent are lots of cash deals from, you know, even smaller regional cities. We saw some Sioux Falls and some Omaha and some Fargo on a deal that we just sent this week to Costa Rica. And then if you wanna use your points and miles using AA miles, just 16,000 of them round trip could get you down there in a lot of cases if you can find the availability for those 8,000 AA mile one way, redemptions. And then same thing if you wanna use, sky miles or, you know, flying blue miles or Virgin miles to book the delta nonstop.
So you can get those sometimes under, like, 24,000 round trips. So they're clearly moving inventory, and I think because of that I had not heard that number, Kyle, until you just said it. If there's really 50% more seats, then next year, you can expect that they're gonna scale that back. So this is the year. If you wanna get down there this fall or winter, make sure you're booking a trip to Costa Rica before the airlines, figure this out and right size their operations.
Yeah. Yeah. Absolutely. I mean, this is this is the pattern that we're seeing play out again and again and again right now. And right now, you know, as we've been talking for the last six plus months now about just how oversupplied Europe is, I mean, every week we're seeing airlines start to tweak and cut back a little bit.
That's doesn't mean that they're slashing flights, all of their flights to Europe, but instead of flying daily over the winter, maybe they're just flying three or four times a week. Or instead of flying double daily, they're chopping it down to just once a day. Lots of changes like that over to Europe, and it's only a matter of time before we start to see that spread elsewhere. Yeah. Beat them.
Beat the airlines to the punch on this one. Go book your trip to Costa Rica and lots of other places, this winter before they figure it all out. Okay. We need to transition to something cold. So a few weeks ago, we talked on this show and you read about it on our website that, basically, we discovered that the airlines were pricing flights much different for solo passengers than they were for traveling pairs or groups.
It was a discovery that led to massive backlash among all types of travelers, especially those who like to fly solo. The airlines more or less retreated. I say more or less because they didn't all. And in some cases, they kinda, you know, wiggled their way back into some of these, deceptive tap tactics, I would call them. But we found they're using another pricing tactic more and more.
What we find this week, Kyle? Yeah. You know, let's let's preface this with, you know, what we found in the spring that airlines were charging solo passengers significantly higher fares than groups of two or more. That was something new and unusual, something that the airlines had not really done at scale in the past. What we've seen now is a return to something that we've seen airlines do, you know, pretty regularly.
You know, it's been ten plus years, but airlines have started once again charging travelers in The United States higher one way fares than they charge per segment for a round trip. You know, for the last, I don't know, ten, fifteen, maybe even more years, that one way penalty has really disappeared because, you know, the major airlines like American, Delta, United, Southwest to a lesser extent were really under pressure from the likes of Spirit and Frontier and Sun Country and other low cost carriers who were always charging half the round trip price for a one way. And so, you know, the bigger airlines had to match, and that has been the case for as long as I can remember, really. You know? And that's the reason why we have repeatedly told people, if you're booking domestically, book one way separately because it's always gonna be half the price, and that gives you some important flexibility.
If your plans change, it's much easier to change one flight at a time than it is to try to unwind one half of a round trip booking. And now it's clear that, you know, the airlines have really ramped this practice back up. So the research that our team did, you know, the people who search for flights every day for Thrifty Traveler Premium members, they ran through 2,000 domestic flights, 1,001 ways, and then another thousand with a return date added in for a round trip booking. And what we found is 50.7% of them one ways were higher prices than they were for half of the round trip fare, which really shocked me. I did not expect to see those numbers quite that high.
It's the first as far as I'm aware, the first kind of analysis that anybody has done to see just how prevalent these one way penalties have become again. Yeah. I think, you know, for all the reasons that we've talked about for so long, the airlines maybe are deciding that, you know, keeping people in a round trip booking, right, keeping them on their planes matters to them a lot. Whereas, you know, I was looking for instance at flights to Grand Rapids, Michigan on Delta, and the one ways were pricing the exact same as the round trip. And, it's just really frustrating because I do love booking one way flights for that flexibility, especially, and also just for the chance that maybe there's a cheaper option on the way home.
In this case, they're gonna say, you know, Delta in this case says, do you wanna fly Sun Country on the way home? Then fine. You're still paying the same fare. So, I think a lot of people have probably run into this at some point, but I'm really glad we did this full analysis and just looked into a ton of fares to see and make sure that we're not all seeing things. You're not crazy out there.
This is happening. No. It's it's happening. And while it might not be exactly new, it is new that it has become this prevalent where you are just as likely to, at this point, to see a higher one way fare than a round trip, per segment fare. It hasn't been like this for very long.
I'm not exactly sure when airlines ramp this up, but this is again, you know, in the same way that we talked about in that podcast about the solo passenger penalties. This is the airline's way of trying to target business travelers to get more money out of them knowing that the average leisure traveler, somebody who's just going on vacation or visiting friends and family or something like that, is most likely going to book a round trip and that, you know, it's the business travelers that really need and value that flexibility of having a one way so they can, you know, book a return flight home, you know, on a different day once they've, you know, got gotten to New York City or LA and figured out what their work week looks like. But, again, you know, I think at this point, people a lot of travelers are really conditioned to just book those one way separately because it had this hasn't been the case for so long. You have been able to book one way at half the cost of a round trip, and that means that, you know, now people are, in many cases, probably significantly overpaying for domestic airfare when they should return to booking a round trip.
Yeah. I guess, moral of the story, at least for right now, until I think the dust settles on all this, is just double check double check what you're booking. Don't just search one way. Don't just search round trip. All of your searches should be both and everything always.
You know? Just look around. Look at every single one of your booking options before you, pull the trigger. We're gonna talk a little bit more about this in our extra mile segment, I think. But first, we're gonna take a quick break.
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Alright. Let's get to the extra mile where we dig into something deeper in the world of travel, and I don't think anything deserves a deeper dive than, looking at the way that airfare is actually priced and how airlines are doing it, specifically using these AI tools. And the reason this is in the news is as you mentioned earlier, Kyle, is that Delta told investors that it plans to use these AI powered fares on up to 20% of its domestic routes by the end of the year. Right now, they said that they're using it at about 3%. And last November, it was right at about 1%.
So clearly, they're leveling up and planning to level up fast. So before we talk about what this is and what this does, how does airfare work now, or how has airfare worked in the past, Kyle? Part of part of why this is so potentially concerning and even alarming is because, you know, transitioning everything, handing the reigns of flight prices over to AI and some of the other big changes that airlines are clearly working on as a piece of that would be a huge departure from how airlines set prices today and how they have set prices, not just for years, but for decades. Because, I mean, it's one of the biggest contradictions in travel, and it's really hard to wrap your head around. But, you know, for as frustrating and mystifying and constantly changing as airfare seems to be to the average traveler, the way that airlines actually set prices is pretty simple, and in many ways, pretty outdated, even antiquated.
So think of it this way. When you search for flights, whether it's with Delta, American, Southwest, or you go to Google Flights, basically, what you're doing is you're querying a database. You're telling them, I wanna fly from Minneapolis to Denver round trip. And then the airlines or that sis that platform that you're using runs the search, and it brings you back, all of the results. And what it does is it searches through a database.
Every airline uses, fare buckets, which is basically an alphabet soup. Literally, there are 24 plus of them, an alphabet soup of fare classes, each with their different rules, their different restrictions, and most importantly, each one has its own price. And it's those different rules and restrictions, like one way versus round trip or one passenger versus two that ultimately determines what fare you get. So it's just running a very simple query. Does this passenger meet the terms of the lowest fare that we can give them?
Yes. And then that's what you get presented. If no, it bumps you up to that next highest fare. So it is for, again, as constantly changing, unpredictable as airfare seems to be. It is run-in a pretty simple manner.
It is not nearly as static or it's not nearly as dynamic as most people really assume it is. And this is the system that has really existed for, at this point, decades. And, you know, even as so much of the world is being run on the Internet and constantly changing, not just by the second, but by the millisecond, the airfare system hasn't really caught up to the twenty first century yet. Yeah. It's funny that I think, people assume that airfare is already doing what these airlines like Delta.
Right. That people assume that, like, you know, daddy Delta is over your shoulder watching you every day, and they're setting a price that they know you're gonna click. I've I've heard from so many people, like, the price of, my flight went up after I searched it a few times. For all of you people out there clearing your cookies, you cookie monsters, there's there's nothing. Alright?
They're not doing this. They're not doing this. They're trying to, but they're not doing it yet. Right now, we're using these fare buckets. The price is going up or down based on if there are fares left there.
You know, someone may have canceled the flight. That's why, your price went down. Someone may have booked that flight before you did. That's why your price went up. That's currently how things work.
I think there's a big misconception that, you know, the airlines are a lot more sophisticated than they are at the moment. Right. And and, you know, to take it to another extreme, and this we're gonna go, like give me 60 seconds for a full on nerd rant. People think that airlines are able to constantly adjust the price of a fare, be it by $5, $10.25, 500, whatever, that they're doing this all the time on their websites. But what actually is happening is airlines are submitting all of their fare inventory to a clearing house called ATP Co, which stands for airline tariff publishing company.
And at least domestically, they can only do that a couple of times a day at set hours. I think it's four or five times a day. And on weekends, they can only do it once per day. They can do this hourly for international routes, but there are some major, major restrictions around how much airlines are actually able to, to change prices. They can add and subtract inventory as much as they want.
So for example, they could have a fare available for a $150 or $250, and they could decide one second. We're gonna zero out that $150 fare and then decide, you know, an hour or two later, we're gonna add it back. And that, again, in addition to people who are booking flights or canceling them, drives a lot of the fluctuations that we see so constantly in the airfare world. But it really is. It's it's shockingly simple the way that it works.
And much of this is really, you know, being driven by, you know, people in airline departments, revenue management who are trying to get the most for any single fare that's out for sale and making these decisions or in many cases, having an algorithm that's automatically making these decisions about what to add and what to subtract and what new fare to put in the market when, you know, the next of four or five, you know, fare submission windows are. But it ultimately is pretty manual. And, you know, I think that the great irony here for me is that you're right. People think that, you know, AI and constant change is the way that airfare works, and that is what has given rise to, you know, this debunked theory that you should be clearing your cookies or search incognito because airlines are tracking your searches, and you can beat them at their own game. That is not true.
But the irony here is that what they're working towards is actually gonna be significantly worse. Okay. So, obviously, let's get a little more into the now of, you know, airfare pricing. I think, we're in a bit of a period of transition where the airlines are clearly, being a little more open about, flaunting the old ways of airfare. So, obviously, they're clearly dissatisfied with how they've, priced all these flights in the past, and they're moving towards things like we mentioned before, penalizing, one way travelers and penalizing solo travelers in a way to kinda get a little extra revenue out of those business travelers with expense accounts who are who are maybe less price sensitive and get sneaky couple extra bucks that way.
But when that news came out, in the spring when we reported the solo traveler tax, if you will, there was a huge uproar. Can you just remind us, like, how did we find out about this and then just kinda take us through what happened after that? Yeah. I mean, it was it was just a total fluke. I was looking for flights for, you know, that trip that we've talked about a couple of times now over to London and then Scotland later this summer.
And, you know, my wife and I needed to get to New York in order to take that trip. And, you know, we just noticed the discrepancy in the price per passenger when searching for one passenger versus two. And that pretty quickly, once I confirmed I wasn't an idiot in that particular instance, and ran the searches again and saw, yes, Delta was actually charging me more when I was trying to book for one passenger versus two. You know, we quickly fanned out and found just how widespread this phenomenon was, that it was something new, that it was something that all three of the country's largest airlines, American, Delta, and United, were doing only on one way trips, which again reinforces the broader picture of what airlines are trying to do here and what they're doing now in particular with ramping up the use of one way penalties on all travelers. But it still works within the pretty antiquated framework of how airlines set prices today, that it's about fair inventory and fair buckets and how many, you know, fair classes you have available and the rules that you can write into those fair classes that say, if you search for one passenger, it's gonna skip you past that $149 fare and bump you into something that's $229.
Or if you're searching one way, that means you're ineligible for that $280 round trip flight to New York. And instead, you're gonna get priced out at a $199 or $209 for a one way ticket, which, again, is no longer half the price of a round trip, which is what we had seen so reliably for the last decade or more. Okay. I think this kinda leads us into the future and what is, I guess, rapidly becoming the present as Delta informed us. But, this kind of first this kinda a the way that they're using AI to, power airfare, I think it's really interesting.
It first kinda showed up on our radar last November when Delta president Glenn Hauenstein kinda spilled the beans a little bit more about, what they were doing and how they plan to do it. So at the time, I just wanna walk through some of his comments then because he's he was a little more revealing then than they have been recently. And he said that it's all about offering the right offer at the right time at the right channel, which obviously makes a lot of sense. But we he also went on to say, we'll have a price available on that airplane at that time that's available to you, the individual. So it's just kind of this hyper individualization of airfare where, you and I in the same room on two different machines are gonna get two different fares for the same, you know, route at the same time based on our booking history and things like that, which is, you know, really, really interesting.
And I think that's where AI comes in as this, like, what he called a super analyst. Well and I think we need to divide this discussion into the near future slash now and the further future of what airlines are clearly working toward. In the near future and right now on a limited part of its domestic network, Delta is using AI basically to supplant the algorithms, the, you know, the actual employees that they have that go in and make adjustments and tweaks to prices still using that fare inventory framework, the decades old system that sets airfare with, you know, 26 plus different fares each with a different price. They're just using, you know, AI in order to make decisions that guide people into different fare buckets as they still exist that are ultimately going to make Delta more money in the long run, and they said that's what they're doing. And then the second piece of this is the is the difficult part to swallow.
It's when, you know, Glenn Hauenstein says, quote, we will have a price available on that airplane at that time that's available to you, the individual. That is true personalization. That is true continuous dynamic pricing. That is something that does not exist today at any sense of scale within the airline industry because the technology as we're speaking right now, the network, the framework to actually price flights in this way does not exist, but airlines are working on it. We know that.
And AI is what is going to be the engine that actually allows that to happen. So AI has very understandably dominated the discussion nationwide about Delta using this for fares and what other airlines are doing it. But the what is actually happening is significantly bigger than just AI. AI is just a really important piece of it. Yeah.
And I think, you know, he mentioned that, especially at the time that they're kinda all in on working with this, this group called Fetchr, an Israeli firm who is, you know, helping a few airlines, including WestJet, Virgin, and AirAsia on some of these kinda hyper personalized fares. He did say that, you know, while they're excited about it, they wanna be smart about it. And, you know, they said that it could be dangerous if it's not controlled and not done correctly. I'm sure, you know, they're thinking of pricing getting way out of hand and then their competitors, you know, really roasting them on a particular route at a particular time. One point I wanna make, Kyle, is something that I think could really, ruffle some feathers out there is he said that, the AI is gonna take into account Delta's, specifically Delta's brand advantage in many fares.
So think about it like this. If you're looking for, Delta flights to Hawaii, and, you know, Southwest as they're as they often do runs a huge sale and it drops airfare all over the country to Hawaii. Delta is, you know, gonna use AI to take into account someone who may have, you know, may have been loyal to Delta in the past and not drop those prices all the way down to match Southwest or just keep them, you know, maybe $20 more or $40 more or $60 more. Whatever the AI tells them is going to, still keep that customer in a Delta fare, which, is a huge disappointment for me, obviously. I love these, you know, fair wars and these, you know, big competitions.
And if, the AI is telling Delta, like, hey. You can still charge a $100 more on this flight to Hawaii, and people are still going to choose you. I really, really don't wanna see that happen, and I hope that they're not quite close on that part yet. Well, you know, I hate to break it to you, Gunnar, but I think they already are pretty close. I think they are, in fact, probably already doing this soon if they're not already.
I think they're right now or in the very near future, the way that they can do this is to look at it on a market by market basis and know that, for example, you know, if Southwest comes in and slashes flights from Minneapolis to Oakland to Honolulu, that they don't really need to match that because their brand loyalty here in Minneapolis from flying nonstop from Minneapolis to Honolulu or, you know, from Minneapolis to LA to one of the islands or Seattle to the islands or whatever, that they're going to be able to get a huge premium compared to what Southwest is charging. And that using AI, it can run the numbers and see exactly kind of where the markets that they have brand loyalty and therefore don't need to compete as much on price. It's it is as Glenn said, told investors, a super analyst. This is, you know, the work of, you know, thousands of people that otherwise, you know, can just be done within, you know, a couple queries and, you know, a minute or two using, you know, the AI tools that they have at their disposal. The future state is actually being able to do this on a person by person basis.
And then the question is, how does how does this happen? You know, where does all of that data come from? What kind of data does Delta have access to, and how do they fold it into their system to determine this? But it's very, very clear that this is the vision, and it's not just the vision of Delta. It's the vision of Fetcher, the company the AI company that they've enlisted to start working on this.
So in, in an article that Fetcher posted about, quote, hyper personalization of airfare, an article that, you know, sometime between July 1 and today was erased from the Internet. In I will just point out in the time frame when people are really starting to talk about Delta and AI and Fetcher. In this, article, Fetcher wrote, quote, remember when offering different prices for business and leisure travelers was the cutting edge? The future of dynamic pricing goes far beyond that. We're talking about understanding each customer as an individual, optimizing every interaction for maximum value and, quote, creating personalized bundles on the fly, offering the right combination of products and services at the optimal price for each customer.
When it comes to pricing and privacy and data concerns, that's like a five alarm fire. Yeah. This, this kinda makes my skin crawl, honestly. Just the way that they wrote this also just mocking everyone. Remember when offering different prices for business and leisure travelers was the cutting edge?
It's like, okay. Thanks. Thanks a lot, guys. Yeah. And I think more troubling in that, that piece that you sent us that they, again, have since scrubbed from their site.
The factors that they're gonna use to set prices are things like lifetime value and past purchase behaviors. So, you know, they're looking at people who have spent more with the airline before or, you know, maybe it's someone who has purchased on a different airline. That could factor in, and they could offer them something maybe a little more enticing. So, but just the personalization of airfare, I think, is going to be, it's gonna be really frustrating for a lot of people, especially now that, Fetcher has kinda let this all out and showed us a little bit, what they're gonna take into account when they're showing you and I different fares sitting across from the table for each other, looking at the same route on the same day. Something that I'm still having trouble wrapping my head around.
Yeah. Well and I just need to stress again, we are still probably a ways away from this. This is something that the industry has been talking about and working towards, not just for years, but for decades. I mean, really predating the rise of AI of the need to really kind of modernize how they set prices and sell them to consumers. I mean, for anyone out there who has heard about NDC, new distribution capability, this is what got, you know, basically the second in command at American Airlines fired last year because they push too hard in some aspects of this.
But NDC is kind of the mechanism through which airlines could really start to evolve how they price things because then that allows them not just to set prices on americanairlines.com or delta.com, but also to share that new pricing structure with Google Flights and Expedia and KAYAK and all of the other sites that people look and book through. So we're still a ways away. This really has still today, you know, this piece of the conversation, really the linchpin for making any kind of continuous dynamic personalized pricing happen, the it's still a topic that is pretty niche in the airline industry. I mean, we're not hearing Glenn Howenstein really talk about it or even nod to it, but it's a topic at, you know, pretty niche aviation conferences and, you know, white papers and trade group discussions and that kind of thing, but it is being talked about and it is being worked on. And in conjunction with AI and the power to take all of the cobs of data on all of us and figure out how to slice and dice it in order to set prices and change prices on a personal basis, that means now is the time to start talking about guardrails, about what airlines should have access to and what should be off limits and how to make sure that, you know, for lack of a better phrase, airlines use this for good and not for evil because there's two ways that this can go, and it could go in both ways.
There's one situation where they use this to you know, where Delta uses this to poach a Southwest customer, and they know, you know, based on whatever kind of data out there that if they offer a better deal, they're gonna get that business. The dark part about this is what kind of data does Delta have on a platinum or diamond medallion that says that person's price point is significantly higher than that $209 fare to Miami, so we're gonna charge that person $449 and find that limit. That part is pretty chilling. Yeah. I think, I did wanna ask you about how this could be good for the everyday traveler.
And I think a lot of people might be thinking, especially with the changes that they've made right now, penalizing solo travelers, penalizing one way bookers. That's, you know, that's gonna hurt the business traveler with an expense account. And in that case, who cares? You know, I don't care if Billy Briefcase has to spend 200 more dollars to get to New York this weekend. Business travelers, I don't really care about you.
What we do here is we're focused on people booking vacations and leisure travel and things where, you know, these we're we're helping people who are not professional, travelers. Well, let's be let's be clear, though. Now more than ever, people can be both. So so both sides of this coin are really important. And and at the end of the day, a lot of what we see in airfare is the entire system, the networks where people fly, where airlines fly, where they're adding new flights.
So much of that is built on the backs of business travelers because that's what makes them the most money. And it is those higher fares for business travelers that allows us to see those much cheaper fares to Costa Rica or Paris or Amsterdam or whatever. So you do need both. At the same time, the to date, most of what the airline industry has done with its current fare system has been used to penalize business travelers. And, you know, using a new age technology with the help of AI and tons of data, we might start to see airlines be able to fine tune that and really find people's breaking point even if they're just going to visit mom and dad somewhere.
You talked about guardrails. I wanna talk a little bit more about that because I'm sure there are a lot of lawmakers out there looking at some of these big companies beating their chest about how excited they are to unveil these new hyper personalized fares and roll out AI, and I'm sure there are lots of lawmakers who would like to, to take a stand on this. Is there anything moving out there in terms of protecting consumers on this? Not that I've seen. The loudest that we've heard from so far is US senator Ruben Gallego from Arizona who has come out and, you know, really called into question what Delta is working towards and the prospect of personalized fares.
I think, again, the tricky part about this is that we're still probably years away from any kind of true personalized, customized, continuous pricing. But, again, I just wanna stress that means that the time to start talking about this is now because if we wait until 2030 when, you know, airline industry groups expect to have this NDC capability and an entire new structure for determining prices and selling fares. If we wait until 2030 to start talking about this, it's gonna be too late. We have to talk about it now about how to make sure, again, to use that phrase that airlines use this for good and not for evil because we know, I think, left to their own devices, exactly what they're gonna do. They're going to use these tools to do what airlines set out to do every single day, which is to charge the most amount of money as possible to fill those planes.
And there's two sides of that coin. There certainly will be some lower fares as a result of personalization and AI and data for people who otherwise might not book that ticket. But if airlines are allowed to really do whatever they want with this, there are definitely going to be fares that are exorbitantly higher because airlines know that people are willing to pay substantially more. And what does that mean? Yeah.
All very interesting. Okay, Kyle. This is the most important thing to me and my employment here at Thrifty Traveler. What does this mean for finding flight deals in both, I guess, the short and long term? I don't know.
I really don't. I it's it's hard to map this out. I mean, just within the last probably four or five days, I've only started to be able to wrap my head around how airlines could make this a reality. That personalized pricing could become a reality on delta.com and Google Flights and Expedia and all of the systems, all of the ways that people book their travel. But that is something that can happen sooner rather than later.
We're still talking years, but it can happen. The airline industry at large is working on it. But and at a macro zoomed out 35,000 foot level, I don't know. Because if airlines are offering every single seat at a different price that they know is or they believe is most likely going to be effective at getting people to hit purchase at the highest point that they can get, that removes so much of the dynamics of what dictates, you know, flight pricing today, which is inventory at specific prices and supply and demand and competition between the airlines. So however this plays out, this is going to have some pretty drastic consequences and changes for all things in airfare, and I don't think we know yet exactly what that might look like.
Yeah. Definitely. I think, you know, especially in the short term, like you said, all the changes that are being made, and, obviously, we're moving towards this kinda these hyper personalized AI pricing. But the changes right now that are being made, I think, are specifically they're still capturable in tools like Google Flights. Right?
We're able to see how they're pricing things and, more or less, everybody's getting the same, you know, search results when they're searching for flights all over The US and around the world, so long as, you know, they're based in The United States. Right? Sometimes we've seen some airline programs price things a little differently based on where you're searching from globally. But, I think one last point I wanna make about this is that, and that actually makes me a little, a little rosier about all this is that as AI currently exists on our side of things, you know, we can't fight back against personalization, like personalized fares right now. There aren't a lot of great ways to do it unless you are really good on a computer.
But I think, hopefully, over time, AI might also be able to help us on this side of things. You know? They're gonna be using it, of course. But, like, currently, ChatGPT cannot help you find cheap flights. That's not something that ChatGPT and other AI platforms are capable of doing.
They're not able to scrape, flight deal data and get you, you know, the cheapest flight to Costa Rica on the day you wanna go, that kind of thing. So, you know, in the short term, we're kinda at the mercy of the airline websites and things like that, but I'm hoping that maybe over time, AI can catch us up to whatever fetcher and whatever the airlines are doing on all this. What do you think about that? It it's certainly possible. I hope you're right.
Right now, like I said, I'm still just struggling to come to grips with what how this changes the airfare market as a whole and how you figure out where the deals are. Because if, you know, the price that you see searching from Minneapolis to Bogota is different than what I see, you start to scale that. How do you how do you tell a group of thousands of travelers, hey. There are great flight deals from Minneapolis to Bogota or from Chicago to London or whatever. So hope hopefully, AI has the answer, but right now, it just feels like a pretty big problem that we're all gonna have to confront within the matter of a couple years.
Yeah. Frankly, a bit of an existential question for a lot of us out here, especially people doing flight deals like this. But, like Kyle said, we have a long way to go until we get there, and we're learning more about it every day too. So all along throughout the last ten years of Thrifty Traveler, it's been giving people the tools to beat their lines at their own game, and we're definitely gonna continue to do that. We're watching you guys.
We're watching you, American Delta United. Don't mess around with our low airfares, please. Anything else on this? No. No.
I you've given me enough of an existential crisis for, for a weekday afternoon to last a while, I think. Good. Alright. Let's, let's answer a question from listener David. Alright.
David wrote us in, and he said, my wife and I have been Chase Sapphire Reserve cardholders for eight plus years now. We are considering changing to a different premium credit card for a couple of reasons. Not really impressed with the new benefits from the Chase Sapphire Reserve and definitely not impressed with the new annual fee. And they're about to start traveling much more frequently with a child starting college across the country and playing volleyball, which means four plus trips per year for the two of us. That should be very fun.
They're considering moving to two different cards. They're trying to choose between the platinum card from American Express or the Delta SkyMiles Reserve card, the kinda highest tier SkyMiles card. They live in a Delta hub. Their Chase renewal isn't until February, so they got a little bit of time to think about it. But they're asking, should we wait and see if the rumored Amex Platinum reboot, comes out, or should we go get the Delta SkyMiles top card and see which is best for them?
What would you recommend? This is kind of a tricky one. Yeah. There's there's a couple of paths you could go here. I mean, I think first, the temptation to wait and see what happens with the Amex platinum card.
We know changes are coming this fall. We know that is going to be accompanied by some kind of an annual fee increase. So I understand it's tempting to wait and see how that plays out. That said, the best time to apply for the Amex Platinum card is before because what will happen is, you know, we have a window between now and whenever this happens this fall to apply at the current rate of $695 a year at the benefits that you currently get, including lounge access, which includes Delta Sky Club access. And then you're paying that.
You're locking that in. You will, at some point, if not immediately, get all of the new benefits that card gets all while still playing paying $695 for that first year with the card. So whatever fee that card increases to, you won't pay that until, you know, next summer or next fall whenever you apply for it a year later. So I would say, you know, if you are on the fence about this, now is probably the time to act. I do think the American Express platinum card is probably a good place to at least start to try things out at least for one year.
Because the other kicker of this is that, you know, we now see, offer welcome offers on the AmEx platinum card as high as a 175,000 points. So at minimum, you have a have a window here to shift a small amount of your spending to the AmEx Platinum card in order to get that bonus. Enjoy the benefits, both the current ones and the new ones whenever those roll out and whatever they are for up to a year. And then I think next year is the time when you when you decide what your long term solution for the Chase Sapphire Reserve is, and just get rid of the Chase Sapphire Reserve before that comes, comes due with the caveat that as with any travel card, especially a premium travel credit card, you should always call the bank and, and ask for a retention bonus. Tell them you're thinking about canceling.
You don't wanna pay this higher fee. And, you know, I'll be interested to see, how generous Chase is with retention bonuses because David is not alone in reconsidering the Chase Sapphire Reserve at this higher annual fee. Yeah. I think that's really good advice. I think, I might hedge and just say maybe one of each for these.
One of you get the platinum. One of you get the reserve. The reason why I would say one of you get the reserve is it's just a little cheaper, and you get that companion pass, which clearly you're gonna wanna use if you're traveling as a duo to crisscross the country to go watch some college volleyball this year. And then, you know, obviously, if, if you're at a Delta hub, the Sky Club access, 15 times a year on the reserve card is pretty nice. And then, the 10 times a year on the platinum card, and then you could use that tricky workaround, that you taught me, Kyle, which is using that $200 ancillary fee benefit on the platinum card to pay for four more $50, SkyClub entries.
So one of you gets fifteen, one of you gets 14. One of you is gonna have to sit out one SkyClub visit if you take 15 round trips this year. Well, no. Because the SkyMiles Reserve card comes with four annual guest passes to the SkyClub too. So you get a lot of Delta Sky Club access with those two cards.
So if you can stomach, you know, that, pretty substantial amount of two annual fees in addition to what you're already paying for the Chase Sapphire Reserve before you dump it, that's not a bad move. Yeah. I think you got a lot of good options. Thank you for reaching out, David. If you want us to answer your question, email us @podcastatthriftytraveler.com, and your question might be featured in next week's show.
We've been getting a lot of really good submissions over there, so thank you all for reaching out. Okay, Kyle. Let's close this thing out, and I'm gonna put you on the spot. Are you ready? Let's do this.
Okay. This one, this one came to me on the drive over here. Alright. What's an airline that you're embarrassed to say that you've never flown? Oh.
Maybe not embarrassed, but, like, what's the biggest hole in your resume? Sure. Yeah. You know, the first one that comes to mind is Etihad. So they have an increasing presence in The United States.
And for all of the times that I have, been to The Middle East and the whole of the times that I've flown Qatar Airways in particular and have even been to Abu Dhabi, yet I've still not flown their flight carrier Etihad. So that's the first one that comes to mind. I guarantee you I'll I'll come up with something even more obvious. In fact, I just thought of it. I've never flown Alaska Airlines.
Yeah. Same. That's gonna be mine. So I have held I've held Alaska's highest or second highest level of elite status before, and I've still never flown Alaska Airlines. I've I'm flushed with Alaska points.
I've held their credit card, but I've never been on one of their flights. I'm gonna end that, next year. I've got Alaska flight booked back from Hawaii, but that was one of mine. And, yeah, I just think it's funny to just listen to see what would be the other one that I get a lot is when I tell people that I'm a travel writer or I write about the airlines and everything. The first thing they say, like, oh, like Emirates?
Like, have you flown Emirates? Like, no. I actually haven't flown Emirates. But everyone when you say, like, you know, yeah. I write about business class seats sometimes, and everyone just immediately goes, like, Emirates.
Like, yes. I know. They they advertise on TV. I understand that. I was gonna say, you wanna signal that their advertising is working.
The fact that they are synonymous with business and first class is, is a testament to their marketing team. Yeah. So that's the one that, I'm embarrassed to say that I've never flown along with Alaska, which I just can't believe that I've never found myself on an Alaska flight given where they fly, how often they fly. We only we only have a few options out of MSP here, but I'm gonna break that streak here soon. Alright.
Jared, our boss, give us a call. We're gonna book some Alaska flights. Kyle and I are going somewhere fun. That's gonna be it for us today. Thank you so much for listening to the show.
Rate us five stars on your podcast platform of choice, and like and subscribe to the show on YouTube as well where you can watch us every week. Send this episode to someone you know who needs a vacation or someone who you know needs to find out a little bit more about what's going on with airfare pricing. If you have feedback for us, send me a note at podcast@thriftytraveler.com. We'd love to hear from you. Positive or negative, let us know what you think.
Kyle, tell us about the rest of the team. This episode was produced by our senior editor, Jackson Newman, and your favorite host who fears AI and technology almost as much as I do, Gunnar Olson. It was edited by David Strutt. Our theme music is by Benjamin Tissot. See you next week.
See you.