Delta Air assures US lawmakers it will not personalize fares using AI
Last week, Democratic Senators Ruben Gallego, Mark Warner and Richard Blumenthal said they believed the Atlanta-based airline would use AI to set individual prices, which would "likely mean fare price increases up to each individual consumer's personal 'pain point.'"
Delta has said it plans to deploy AI-based revenue management technology across 20 per cent of its domestic network by the end of 2025 in partnership with Fetcherr, an AI pricing company.
"There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized prices based on personal data," Delta told the senators in a letter on Friday, seen by Reuters. "Our ticket pricing never takes into account personal data."
The senators cited a comment in December by Delta President Glen Hauenstein that the carrier's AI price-setting technology is capable of setting fares based on a prediction of "the amount people are willing to pay for the premium products related to the base fares."
Last week, American Airlines CEO Robert Isom said using AI to set ticket prices could hurt consumer trust.
"This is not about bait and switch. This is not about tricking," Isom said on an earnings call, adding "talk about using AI in that way, I don't think it's appropriate. And certainly from American, it's not something we will do."
Delta said airlines have used dynamic pricing for more than three decades, in which pricing fluctuates based on a variety of factors like overall customer demand, fuel prices and competition but not a specific consumer's personal information.
"Given the tens of millions of fares and hundreds of thousands of routes for sale at any given time, the use of new
technology like AI promises to streamline the process by which we analyze existing data and the speed and scale at which we can respond to changing market dynamics," Delta's letter said. It added that AI can "assist our analysts with pricing by reducing manual processes, accelerating analysis and improving time to market for pricing adjustments."
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