How a 25% discount on airfare cost a Montreal couple more — thanks to dynamic pricing

When beam Canada proclaimed a 25 per cent deduction on alkali fares before this month, Dan Pomerantz and Melanie Lyman-Abramovitch thought they were in for a deal. 

Just 15 hours prior to the announcement, the Montreal couple had booked an Air Canada return flight from Montreal to Chicago for July. Because they were still within the 24-hour free cancellation window, they decided to cancel their original tickets and rebook to take advantage of the new sale. 

"I was like, 'Oh, this is great,'" said Lyman-Abramovitch. "We'll get 25 per cent off. Fantastic."

However, even with the 25 per cent discount applied, the couple’s rebooked tickets were slightly more expensive than their original booking.

"I was pretty angry. I was very unimpressed," said Lyman-Abramovitch. "It felt very deceptive, like the sale wasn't really a sale at all."

Air Canada disagrees. 

The airline said the couple got an undisclosed 20 per cent discount on their original booking — a discount that did not show up on their original receipt. 

The couple's rebooked tickets, with the steeper 25 per cent discount, still cost $5.71 more. Air Canada attributed the price difference to dynamic pricing — a widespread industry practice where base fares fluctuate in real time based on factors like projected and current demand.

The couple's experience is a cautionary tale for anyone trying to capitalize on an airfare discount promotion; when dynamic pricing is at play, the sale can spike demand, ultimately driving up the base fare that’s being discounted.

"They're selling you on the discount. That’s where people get stuck in terms of understanding what's the actual price," said John Gradek, co-ordinator of the aviation management program at McGill University in Montreal. 

"The percentage discount can stay the same, but the price of the base fare will go up."

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As more businesses adopt dynamic pricing to boost profits, some industry experts are calling for greater transparency, so customers can determine if an advertised sale — based on a fluctuating base price — is a genuine deal. 

"How you base a sale has morphed into something today that is incomprehensible to the traveling public," said Gradek. "It is the Wild West."

Canada's Competition Bureau is currently scrutinizing the rise of algorithmic pricing — the automated technology driving dynamic pricing strategies. In a 2025 report, the enforcement agency noted that the practice "is gaining momentum ... In sectors from hospitality to concert tickets to ridesharing."

As such, the Bureau recently held public consultations on the emerging trend. It noted that some respondents expressed concern that pricing algorithms operate as a "black box," making it difficult to understand or challenge a set price.

Pomerantz and Lyman-Abramovitch said they were blindsided twice: first, by the hidden 20 per cent discount on their initial booking, and second, by how quickly the base fare changed. 

"We have no way to see how dynamic pricing is actually affecting the prices of things, so we can't truly be an informed consumer in that sense," said Pomerantz.

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Air Canada spokesperson Peter Fitzpatrick said in an email that the base fare for the first two tickets the couple purchased totalled $279.96, which dropped to $223.97 with the 20 per cent discount. 

By the time the couple rebooked 15 hours later, Fitzpatrick said the base fare had jumped by $26.28 due to rising demand. As a result, the new fare, with the bigger 25 per cent discount applied, was $229.68 — $5.71 higher than the initial tickets.

"The response to our promotion was strong," said Fitzpatrick. "The less expensive seats were purchased first, leaving only seats in the more expensive categories available."

He added that customers who take advantage of an Air Canada promotion get "the best available fare at the time" of their booking. 

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Still, Pomerantz and Lyman-Abramovitch say their experience has left them wary of discounted airfare promotions. 

"It's not a formula that has any transparency behind it," said Pomerantz.

"I am very frustrated with the industry and I would like to see some change," said Lyman-Abramovitch. 

Canada’s Competition Act prohibits misleading advertising, such as promoting an inflated "regular" selling price during a sale. 

However, when a company utilizes dynamic pricing, advertised discounts exclude a fixed base price. As a result, customers are unable to calculate their true savings and may find it difficult to compare prices with competitors. 

"It's not clear, actually, how firms can be complying [with the law] in this environment of dynamic pricing," said Pascale Chapdelaine, an associate professor of law at the University of Windsor who researches algorithmic pricing. 

"Those laws were adopted at a time where dynamic pricing didn't exist to the extent that it does today."

During the Competition Bureau's consultations on algorithmic pricing, some respondents requested that the federal government step in to regulate the practice to ensure fairness and transparency.

Chapdelaine suggests the government could mandate that businesses using dynamic pricing be upfront about how their algorithms operate during a discount promotion. 

"Disclosing this could help consumers to make, I think, a more informed decision," she said. 

Leblanc said the Bureau continues to monitor the use of dynamic and algorithmic pricing and its "potential to disrupt competition in Canada."

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