The Competition and Market Authority has launched a fact-finding investigation into the use of pricing algorithms in air transport passengers on the connecting routes between the peninsula and the Sicily and Sardinia, characterized by particular mobility needs. With a press release, the Antitrust explains that in conjunction with the recovery in demand for passenger air transport, starting from 2022, high price levels have been detected by institutional and non-institutional entities corresponding to periods of peak demand.
Algorithms for airline flight prices
Airlines have been adopting pricing systems for years which, thanks to the use of algorithms and software for data processing, differentiate and adapt flight costs over time. In recent years, the Agcm continues, the degree of automation and sophistication of these systems has significantly increased, both due to the exponential growth of the information that can be processed and due to technological evolution. In perspective, the use of techniques artificial intelligence and machine learning could enable the use of self-learning algorithms, capable of developing new pricing criteria.
Possible effects on the market
The investigation activity will concern i possible negative effects on the functioning of the market and on the conditions of offer to consumers linked to the use of price algorithms, in the reference context. The investigation will also delve into the methods of communicating to the public the prices of airline tickets and their various components.
Possible structural measures
In consideration of the new regulatory provisions referred to in art. 1 of the Asset Legislative Decree 104/2023 (converted with amendments by law 136/2023) the Authority may, following the fact-finding investigation, impose on companies behavioral or structural measures to eliminate distortions of competition or to recommend appropriate legislative/regulatory changes to improve the functioning of markets. Furthermore, if – during the procedure – companies present commitments, the Authority will be able to evaluate their suitability for resolving the critical issues identified and make them mandatory.
Satisfaction from Codacons, which last November 5 denounced through a report i increases in the prices of airline tickets to Sicily and Sardinia in view of the Christmas departures. According to the Codacons complaint, to fly to Catania starting on December 22nd with a one-way ticket, in recent days a minimum of 206 euros starting from Milan, 231 euros from Bologna, 239 euros from Turin and 242 euros from Florence. If the departure date was moved to December 23, the cost rose to 273 euros per ticket starting from Turin, 286 euros from Florence. To get to Palermo by boarding on December 23, the minimum expense was 143 euros from Rome (always one way), 220 euros from Milan, 269 euros from Turin and even 314 euros from Bologna. Prices which – reports Codacons – are growing further as departures get closer
Precisely to combat the phenomenon of high flight prices during the Christmas period Codacons asked the Antitrust to “intervene on yet another increase of airline flights to the detriment of workers and students returning home during the holidays. We cannot help but wonder what happened to the Government measures introduced with the Asset Decree and which were aimed precisely at avoiding what Codacons recorded, i.e. an increase in tariffs for connections with the islands during a period of peak demand”.