Italian Antitrust Finds Airlines Use Pricing Algorithms to Raise Fares to Sardinia
Italy's competition authority confirmed that airlines use pricing algorithms to raise fares to Sardinia and Sicily during peak periods, but said it could not establish the algorithms' causal weight and extended its investigation by one year without taking enforcement action.
What happened
The Italian Antitrust Authority (Agcm) completed a preliminary investigation into pricing algorithms used by airlines on routes to and from Sardinia and Sicily. The Authority found significant price increases in certain periods, particularly around holidays such as Easter, Christmas and New Year, weekends, long weekends, and summer.
Reported impact
On 20 August, flights departing from Sicily and Sardinia had average prices of approximately €140–160, with about 40–50% of passengers paying over €150. On 23 December, flights to Sicily had average prices of €160–180, with 60–70% of passengers paying over €150, including 30–40% paying over €200.
Index analysis
Airlines use one or more algorithms to set fares, incorporating factors including number of bookings, flight fill rate and speed, historical booking trends, route, season, departure date and time, and days until departure. Each airline's systems differ, resulting in significantly different temporal price dynamics, sometimes with discrete jumps between fare classes and sometimes with gradual or continuous transitions. Ancillary services such as seat selection and baggage also vary according to these algorithms.
Governance controls
The Antitrust Authority stated it could not determine the weight of algorithms on the price anomalies identified, and extended the investigation closure deadline by one year to 31 December 2025 without taking enforcement action against airlines.
Classification
Sources and evidence
This record was researched and written by the Index, based on the following original reporting.