Delta's AI fare strategy: Cheaper flights or high-tech price hikes?
is changing how
ticket prices
are decided by letting artificial intelligence take the wheel. In a bold move, the airline is using AI to help determine airfare on some U.S. domestic routes. While only about 3 per cent of flights are currently covered, Delta plans to expand this AI pricing system to 20 per cent by the end of 2025. This new approach replaces traditional fare setting methods with real time pricing decisions, based on data like travel demand, competitor prices, and booking trends. Delta says the system developed by Israeli tech firm
Fetcherr
is already boosting revenue and efficiency.
How it works: AI-powered dynamic pricing
Delta's AI system, developed by Israeli startup Fetcherr, analyzes a wide range of data in real time such as demand trends, market fluctuations, booking pace, and competitor pricing. Rather than using static fare charts, the AI suggests optimal prices that can adapt instantly to changing conditions.
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Delta
President Glen Hauenstein called it a 'reengineering' of pricing science and noted early trials have led to 'amazingly favorable unit revenues,' a metric used to gauge profitability per seat.
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Concerns over fairness and transparency
Despite Delta's optimism, the move has sparked concern among lawmakers and consumer advocates. Senators Mark Warner, Richard Blumenthal, and Ruben Gallego sent a letter to the airline questioning whether AI driven fare decisions could lead to "
surveillance pricing
." Their concern: that AI might use personal data to charge individuals based on their perceived willingness to pay.
Delta responds: No personal data used
Delta has firmly denied using personal information to set prices. In a statement, the airline clarified that it does not use browsing history, financial details, or customer profiles. Instead, pricing is based on anonymized market data and traditional travel factors like origin, destination, date, seat class, and refundability. 'All customers have access to the same fares,' a Delta spokesperson emphasized.
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A broader trend in air travel?
Industry analysts suggest this is just the beginning. As airlines compete for profitability in a volatile market, many are likely to adopt AI tools to gain an edge. While dynamic pricing isn't new, the speed and granularity offered by AI raises concerns about fairness and transparency.
Consumer rights groups are keeping a close eye on the issue. A new bill in Congress, called the Stop AI Price Gouging and Wage Fixing Act, seeks to ban the use of consumer profiling in pricing and could impact how AI tools like these are used in the future.
FAQs
Q1. What is Delta's AI pricing system?
A1. Delta is using artificial intelligence to set ticket prices based on real-time market data. The system is designed to optimize fares depending on demand, competition, and booking trends.
Q2. How could AI-based pricing affect travelers?
A2. Travelers may see more frequent changes in fares based on demand and timing. It might get harder to know when you're getting the best deal.
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