Canada’s two largest airlines are using an airfare prediction app to unload some of their seats via “secret fares” at discounts of up to 35 per cent.
Air Canada and WestJet are among the first global airlines to make their flights available for the large discounts, starting Wednesday.
Montreal-based app developer Hopper said other airlines such as LATAM, Turkish, Copa and Air China will be joined by other carriers in the coming weeks.
The discounts are available on more than 60,000 routes to international destinations such as Tokyo, Melbourne, Paris, Barcelona, Rio De Janeiro and Costa Rica. There are currently no domestic routes.
The app will alert users to secret fares that could result in savings of up to $500 on long-haul flights.
Hopper said these low fares aren’t available online.
Instead, it communicates directly with app users to avoid triggering a competitive reaction that could lead to a fare war among airlines.
‘Mobile-only, closed environment’
Airlines largely see secret fares as a complementary distribution channel, said Dakota Smith, Hopper’s head of growth and business.
“Being a mobile-only, closed environment puts Hopper in an extremely unique position to offer a new way to reach brand-neutral consumers who do most of their shopping on the phone,” he said in an email.
Hopper sends personalized recommendations and data-driven results using push notifications. It sends more than 400 million push notifications a year.
Smith said airlines give the heavily discounted rates to fill planes and increase their bookings beyond their fair share — the percentage of seats an airline flies on a route.
“To increase their share, they need to stand out from competing airlines in a way that cannot be publicly replicated,” he added.
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Air Canada didn’t respond to requests for comment, but WestJet said mobile use is an important way for it to connect with potential customers, along with its own website and travel agents.
“Hopper, as with other online travel agents that WestJet works with, sells both published and private fares,” said spokesperson Lauren Stewart in an email.
She said private fares are provided to travel agencies at a discounted rate depending on the needs of the airline.
“This is standard and a long-standing practice in the commercial aviation industry,” she added.
Smith said Hopper hopes to offer secret fares soon from U.S. and European airlines.
Hopper said more than 20 per cent of its sales are generated by its artificial intelligence algorithms that make recommendations for trips that passengers may not have even searched for.
Unlike some online searches that don’t identify the provider, the secret fares provide all details about the flight such as the airline, departure time and arrival time before booking.
Hopper said more than 60 per cent of its users are millennials, 90 per cent are leisure travellers and 52 per cent are travelling internationally.