Charter pricing and AI: will technology fix transparency or break it?
Technology is doing for the charter industry what it did decades ago for the airlines. It's giving far more power to the consumer to find and book flights. But this same technology, and now artificial intelligence, is either solving charter brokers' biggest problem — or making it worse.Search for any private flight and you'll get an array of options — but little price transparency. Sure, the quotes returned look transparent. But they are often either unattainable or there are so many strings attached that they're unrealistic.Linear Air, a Boston-based charter marketplace, and where I sit on the Board of Managers, has been railing against misleading pricing."The rise of AI answer engines is amplifying a concerning trend in the charter community," says Justin Nihon, CEO of Linear Air. "When companies publish charter rates that aren't realistically attainable, those figures become embedded in search results, shaping consumer expectations before they ever request pricing. Consumers enter the market only to discover that actual quotes are often significantly higher. That disconnect erodes trust and ultimately damages the reputation of an industry that has worked hard to improve transparency and credibility."Linear Air said it is working with leading industry and trade associations to raise awareness of misleading pricing practices and has encouraged regulators and governing bodies to provide greater oversight and enforcement of existing regulations where applicable.In other words, if you search for a flight on some broker sites, you get — what I would call — "made up" pricing. This creates numerous issues. First, it could be illegal. If that price was never available, it's basic bait and switch. Second, it represents unfair competition with honest brokers. And third, it really pisses off the consumer. Imagine if you booked a flight on a commercial airline and then received a message: "The flight is really 20% more, please pay now."The DOT rules regarding pricing are pretty clear. The regulation is under Part 295 and states that, on the customer's request, a charter broker must disclose the total cost of the transportation, including any broker or carrier fees and government taxes. And they are prohibited from misrepresenting the total fare. The goal of the regulation is to avoid confusion in the marketplace. Reputable brokers already do this, as well as meeting the other DOT mandatory disclosure requirements.When a broker quotes you a price, it is supposed to reflect the full cost — taxes, landing fees, even the cost of the popcorn at the FBO. But often, it does not.Pricing private flights is difficult. There are many factors that make up a price (airport fees, deicing, cleaning up after your pet vomits all over the carpet), and it may be impossible for a technology-driven broker to get it right 100% of the time. But with all the tech we now have, there are ways to make it better.One has to wonder if some online brokers are intentionally low-balling pricing in order to capture customers and data. It often looks suspicious. At the very least, these AI-driven search results capture your email, the better to pummel you with offers.There are ways an educated consumer can proceed. They can always book directly with the operator who has served them well in the past. But that may not be practical if they have different missions and requirements. If they use a broker who doesn't honor the price advertised, they should complain to the United States DOT, which regulates the consumer side of the industry, and my advice is to never use that broker again.In the end, it's up to the consumer to take all the power the internet provides. Research, do your homework, and ask questions.After all, charter pricing shouldn't be like a box of chocolates, where you never know what you're going to get.