Delta disputes allegations of utilizing AI for determining flight rates following criticisms from lawmakers in Congress
Delta Air Lines Explores AI for Ticket Pricing and Beyond
Delta Air Lines is considering the use of artificial intelligence (AI) to optimize ticket pricing for up to 20% of its domestic flights by the end of 2025, according to recent reports[1][2][4]. The airline is currently evaluating AI-based revenue management technology developed by Fetcherr, primarily for reducing manual processes, accelerating analysis, and improving time to market for pricing adjustments[1][2].
However, it's important to note that Delta Air Lines has not yet implemented AI to set prices for flights. The airline's ticket pricing is currently dictated by market dynamics and vigorous competition, not personal data or individualized pricing[1][2]. Delta maintains that it does not use personal customer data to charge different fares[1][2].
The AI being tested by Delta Air Lines aggregates purchasing data for specific routes and flights, and is used to forecast demand for these routes[1][2]. The technology is capable of predicting the amount people are willing to pay for premium products related to base fares[1].
Delta President Glen Hauenstein stated that the AI technology is a step towards personalized pricing, but emphasized that the airline does not currently have a fare product that targets customers with individualized prices based on personal data[1][2].
The planned use of AI for ticket pricing has sparked controversy and regulatory scrutiny. Several U.S. senators have raised privacy concerns and criticized the lack of transparency, warning that AI-driven individualized pricing could result in fare increases targeting consumers’ maximum willingness to pay, potentially disadvantaging travelers financially[1][2][3]. The Federal Trade Commission has previously investigated "surveillance pricing," but the current status of that inquiry is unclear[2].
Notably, American Airlines CEO Robert Isom has stated that using AI to set ticket prices could hurt consumer trust[1]. Delta Air Lines, for its part, insists that its AI pricing is based on broad market forces rather than individualized personal information[1].
In an interview at CES 2025, Delta Air Lines CEO Ed Bastian spoke about the company's developments in AI, stating that the technology adapts to new market conditions[1]. The debate over the use of AI in ticket pricing continues, with discussions revolving around privacy, fairness, and consumer impact[1][2][3][4].
[1] Delta Air Lines to use AI for ticket pricing
[2] Delta Air Lines' AI-driven ticket pricing sparks controversy
[3] Senators raise concerns over Delta's planned AI-driven ticket pricing
[4] Delta Air Lines evaluates Fetcherr's AI-based revenue management technology
- The application of artificial intelligence (AI) by Delta Air Lines in their business strategy extends beyond ticket pricing, as they also evaluate AI-based revenue management technology for reducing manual processes, accelerating analysis, and improving time to market for pricing adjustments.
- Despite the controversy and regulatory scrutiny, Delta Air Lines' finance department is actively exploring the utilization of AI technology to predict the amount people are willing to pay for premium products related to base fares, signifying a possible shift towards a more personalized pricing model in the future.
