Senators demand answers about Delta's new AI-driven pricing plan
Sen. Ruben Gallego of Arizona sent a letter to the airline on Monday asking for the company to clarify what data it's using to determine prices and the scope of its planned AI rollout.
"Delta's current and planned individualized pricing practices not only present data privacy concerns, but will also likely mean fare price increases up to each individual consumer's personal 'pain point' at a time when American families are already struggling with rising costs," reads the letter, which was also signed by Sens. Mark Warner of Virginia and Richard Blumenthal of Connecticut.
The letter comes after Delta president Glen Hauenstein told investors earlier this month that the company aimed to expand AI pricing to 20% of its network by the end of the year. He said the technology is currently used on about 3% of its domestic network.
Delta first announced the AI pricing during an investor event in November, calling it a "full reengineering of how we price and how we will be pricing in the future."
"We're in heavy testing phase. We like what we see," Hauenstein said in July. "We like it a lot and we're continuing to roll it out."
While airlines have used dynamic pricing for decades — setting fares based on factors like demand, timing, and the website a customer uses — the use of AI for these purposes has drawn concerns about price discrimination.
In a statement to Business Insider, a Delta spokesperson said the company would not use personal information for dynamic pricing.
"There is no fare product Delta has ever used, is testing, or plans to use that targets customers with individualized offers based on personal information or otherwise," the spokesperson said.
The spokesperson said the new tech is "streamlining" the dynamic pricing model "that's been used in the global industry for decades."
Delta is working with Fetcherr, an AI firm whose clients include other airlines like Virgin Atlantic and WestJet, to power the pricing changes.
Still, Gallego has expressed concerns that the AI strategy could allow Delta to "squeeze you for every penny," he wrote on X in July.
"This isn't fair pricing or competitive pricing. It's predatory pricing. I won't let them get away with this," he wrote.
This isn't the first time Delta has been in hot water over pricing recently. Earlier this year, the company was one of several major airlines to introduce new fares that hit solo travelers with higher prices. Delta and United withdrew those fares after public blowback.
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