Dynamic pricing is coming to Lufthansa. The German carrier will be adding dynamic award pricing for use in its Miles & More frequent flyer program. The program had been using a tiered system that calculates the cost of each ticket using a set number of reward miles up until now. Those tickets will be priced based on actual current retail rates under the new system.
Dynamic pricing is a growing trend in the airline world. Delta and United are two carriers that have already embraced dynamic pricing. However, Lufthansa is the first major European carrier to use dynamic pricing in its loyalty program. The airline probably won't be alone for long. British Airways has hinted that dynamic pricing is planned for the future.
Airlines see dynamic pricing as a way to avoid losses without getting rid of reward miles. The approach allows carriers to push the value of a ticket up or down depending on what the market dictates. This is a change from assigning set values to trips using award charts that travelers can reference when booking flights. Travelers can either win or lose when it comes to dynamic pricing.
Airlines that use dynamic pricing are taking the predictability out of the booking process for reward members. The way a value schedule looks one week may be totally different from what travelers see during another week. It definitely requires more work and diligence to book trips. Travelers could lose out during peak travel periods. However, there is also the possibility for dynamic pricing to push some ticket prices extremely low during off-peak times.