I expect this to have a large downside in that it introduces a negotiable element into the price. And as such you'll see it become mandatory that you negotiate (just as frequent flier miles became mandatory) and as a result margins will decrease.
Also, while people here are thinking mostly about retailers like Amazon, I'd say that even with all the data they have and the processing and engineer power they throw at it, they still haven't caught up to the airlines in terms of efficiency at determining how much people are willing to pay for something.
Airline yield management -- which includes both setting the price buckets for different fare classes, and deciding which flights/routes get allocated certain numbers of seats in different fare classes -- is a dark art.
And in case someone happening by is confused by that, I'm not talking about economy class versus first class here. In the US, for example, there may be a dozen or more different fare classes which all book the same type of seat in the same cabin of the same aircraft, but which have different prices attached to them. This is the source of a lot of (inaccurate) advice to do things like booking tickets on certain days of the week or at certain times to try to get the lowest price. Airlines dynamically allocate and re-allocate differently-priced fare classes to flights all the time, and unless you really really know what you're doing, have time (which isn't free) to spend on it and pay (which also isn't free, obviously) for a service that lets you scan inventory by fare class, you're not going to reliably get the lowest price.
For example, by my count currently American has 14 fare classes which initially book into the economy cabin (and with different rules about how and whether they upgrade to a different one), Delta has 15, and United has 17. These vary by level of discount, restrictions on change/refund, who they're offered to (Delta has some which are known to be explicitly a "we only use this to indicate a fare where we're trying to price-match another airline on the same route", for example, and all three have fares for things like government and military travel), etc. and price differently.
Yeah airlines "yield management" and "pricing" departments are indeed a black art.
But, by and large, they're still not "personalizing" pricing. Instead they are basing pricing on factors like demand, destination, whether you're doing a Saturday stay (business travelers wont, so they'll charge more), how close you are to departure, etc etc.
Plus they're now tweaking their frequent flier programs as a way to encourage people not to buy the "absolute cheapest" fare available.
I recently booked a delta flight from sfo to San Juan, connecting in jfk. Got off in jfk and "missed" my flight. Saved over $1000 versus buying a ticket on the same flight from sfo to jjfk.
