Latest news with #Delta Air Lines
Reuters
4 days ago
- Business
- Reuters
US threatens Mexican airline flights over cargo, competition issues
WASHINGTON, July 19 (Reuters) - The Trump administration said on Saturday it is taking a series of actions against Mexico over the Mexican government's decisions to rescind some flight slots for U.S. carriers and force U.S. cargo carriers to relocate operations in Mexico City. U.S. Transportation Secretary Sean Duffy said in a statement the department could disapprove flight requests from Mexico if the government fails to address U.S. concerns over decisions made in 2022 and 2023. The department is also proposing to withdraw antitrust immunity from the Delta Air Lines (DAL.N), opens new tab joint venture with Aeromexico to address competitive issues in the market. Mexico is the most popular international destination among U.S. airline travelers. Delta said if the U.S. Department of Transportation withdraws approval it "would cause significant harm to consumers traveling between the U.S. and Mexico, as well as U.S. jobs, communities, and transborder competition." The Transportation Department said Mexico has not been in compliance with a bilateral air agreement since 2022 when it abruptly rescinded slots and then forced U.S. all-cargo carriers to relocate operations in 2023. Mexico's Transport Ministry and major Mexican airlines, including Aeromexico, could not be immediately reached for comment. Duffy said Mexico was expected to complete construction to alleviate congestion at Mexico City's Benito Juarez International Airport (MEX), but that has yet to materialize three years later. "By restricting slots and mandating that all-cargo operations move out of MEX, Mexico has broken its promise, disrupted the market, and left American businesses holding the bag for millions in increased costs," the department said. The USDOT also said it could take action against European countries over limitations at airports. "We are monitoring European States to ensure that they apply the Balanced Approach process for noise abatement at their airports and do not implement unjustified operational restrictions," the department said. The Transportation Department issued a pair of orders requiring Mexican airlines to file schedules with the department for all their U.S. operations by July 29 and requiring prior U.S. approval before operating any large passenger or cargo aircraft charter flights to or from the United States. "Mexico has altered the playing field significantly for airlines in ways that reduce competition and allow predominant competitors to gain an unfair advantage in the U.S.-Mexico market," the department said. "Mexico's actions harm airlines seeking to enter the market, existing competitor airlines, consumers of air travel and products relying on time-sensitive air cargo shipments traded between the two countries, and other stakeholders in the American economy.' If the U.S. rescinds antitrust approval for Delta and Aeromexico, they would be required to discontinue cooperation on common pricing, capacity management, and revenue sharing, but Delta would also be able to retain its equity stake in Aeromexico, maintain all of its existing flying in the U.S.-Mexico market unimpeded and continue a partnership.
The Independent
6 days ago
- Business
- The Independent
Delta's AI pricing — good or bad? Experts give their verdicts (and it's not great news for business-class fliers)
Delta Air Lines has revealed that it wants 20 percent of flights to be priced using AI by the end of the year, up from three percent presently. Ultimately, it wants all flights to be ticketed using artificial intelligence. What does this mean for passengers? We asked financial and travel experts, from a frequent flier to a former Walmart and Amazon pricing analyst, for their take on what the move will mean for prices and consumer trust in Delta. And one thing is clear. It's a hot debate. Here we explain how AI pricing works, plus the good, the bad and the potentially ugly of the system, including why business-class passengers, in particular, should be concerned. How will Delta's AI pricing work? Think of AI pricing as taking dynamic pricing, which is already around, to the next level. Sean Cudahy from The Points Guy explains: "We've all searched a flight, found a price, and come back the next day to see that it's spiked by $100. Or, maybe, you got lucky and it dropped by $50. Expect more of that. "Delta says its AI pricing tool amounts to a 'super-analyst' working around the clock. Expect that super analyst to constantly be calculating what it would take to get a passenger to book a seat, or what price point it could raise a fare to, to maximize profits without risking the seat going unsold." Delta's system is supplied by Israeli start-up Fetcherr, which will set the fare and the number of seats offered at that fare for each shopper in near real time. Nabeel Siddiqi, CEO at Price Perfect, likens it to the way merchants in markets of old would "read" a customer and charge based on what they think the customer could afford. The pros for passengers Gonzalo Vazquez, CEO Airlines AI Studio at Globant, applauds the move, telling The Independent that it "reflects a broader shift in the industry toward personalized pricing, using AI to better match fares to individual customer preferences and willingness to pay". He adds: "By moving away from rigid, legacy pricing structures, Delta is embracing a more modern and dynamic retail model that can benefit both the airline and the passenger. "Airlines have long relied on outdated systems that limit flexibility and responsiveness to real-time market signals. "Embracing AI-driven pricing allows Delta to innovate in how value is offered and perceived, bringing the airline closer to modern retail practices seen in other industries." He argues that AI pricing will mean a shift for passengers towards "more tailored options, potentially unlocking better deals for those who are price-sensitive while giving others the ability to pay for added value or convenience". In short, he says, it "opens the door to more flexibility in how travel is packaged and sold". Philip Carls, board member at Priceagent and former pricing lead at both Walmart and Amazon, agrees that there are positives. He says: "There may be lower prices for some customers. For instance, budget-conscious travelers may see discounted fares to incentivise bookings, and frequent fliers could get exclusive discounts or upgrades, with some customers benefitting from dynamic deals if Delta uses data to offer last-minute discounts to fill seats." The cons for passengers "Business travelers should pay attention," says Sam Hollander, Co-Founder at Autopilot. "If Delta's AI knows you consistently book premium cabins and expense through corporate accounts, why wouldn't it test higher price points? The algorithm will identify customers with lower price sensitivity and adjust accordingly." Nabeel Siddiqi remarks that this could cause a headache for Delta. He explains: "Customers who could afford more will end up paying a higher amount, which they won't be happy about. This can be a PR nightmare due to annoyed customers who feel taken advantage of." Vaclav Vincalek, CTO at Hiswai, shares these concerns, remarking that "as flashy and trendy as the announcement is, one should consider the emotional impact on customers when they find out that for the same row and aisle seat, somebody paid 20 percent less". He adds: "Imagine being in a grocery store and learning that you just paid $5 for a carton of milk that the person in front of you got for $4." Trust issues Several experts stressed that AI pricing could fuel mistrust in Delta. Andrew Romanyuk, Co-Founder, SVP of Growth at Pynest, said: "The worry is that it becomes another black box. If people don't understand what's going on, they'll just assume the worst. Is it because they waited too long? Because they booked from an expensive zip code? Because the algorithm thinks they have more money? "AI pricing isn't bad in itself. But unless it's done with some empathy for the passenger, it's going to feel shady, even if the math checks out." Robin Anderson, Head of Product Management, Tribe Payments, said: "The challenge is to make AI a tool for better experiences, not confusion. "That means clear pricing logic, transparency, and a smooth payment journey. Trust is a fragile commodity in travel. "If Delta can roll this out with clarity and control, it could set a new standard for how we book flights. If not, 'intelligent' pricing could quickly start to feel like unpredictable pricing, and that's when trust breaks down." Is there a way to sidestep AI pricing? Yes. Sam Hollander said: "Airlines track you through browser cookies even when logged out. Using incognito mode and a VPN [virtual private network] creates a fresh digital fingerprint, potentially helping you avoid being flagged as a high-value customer who might pay premium prices." The result for Delta? Happy Delta shareholders will be the upshot from the AI revolution, it's argued. Sean from The Points Guy says: "This tool will predict and monitor supply and demand trends, predict how much it can charge a customer for a ticket without risking losing that customer and predict how much it might need to discount a seat to avoid that seat going empty ('spoiling inventory' in airline parlance). "If this tool makes Delta more effective in those tactics, I imagine the shareholders will be happy."
Gizmodo
6 days ago
- Business
- Gizmodo
Delta Wants 20% of Flights to Have AI-Powered Dynamic Pricing by the End of 2025
Last year, Delta Air Lines announced it was testing out dynamic pricing on some flights using tools built by the tech company Fetcherr. And while the test was initially limited, executives from the company announced that 3% of flights now use AI pricing, and they hope to sell 20% of all tickets using a dynamic price by the end of the year. Edward H. Bastian, the CEO of Delta, explained the strategy on an investors call last week, noting that it was 'optimizing revenue through [its] partnership with Fetcherr,' an Israeli tech company founded in 2019, and 'leveraging AI-enhanced pricing solutions.' 'So today, we're about 3% of domestic. And that's… our goal is to have about 20% by the end of the year, and that's a goal,' Glen Hauenstein, the president of Delta, told investors on July 10. 'I mean, we can report back on what the actual numbers are. But you have to train these models as you might, and you have to give it multiple opportunities to provide different results.' Hauenstein said the company was in a 'heavy testing phase' but that executives at the company 'like what we see.' 'We like it a lot, and we're continuing to roll it out, but we're going to take our time and make sure that the rollout is successful as opposed to trying to rush it and risk that there are unwanted answers in there,' the president said. What does that mean? If you ask critics like Sen. Ruben Gallego, a Democrat from Arizona, it means Delta isn't being fair about the way it's pricing seats. 'Delta's CEO just got caught bragging about using AI to find your pain point—meaning they'll squeeze you for every penny,' Gallego wrote Tuesday on X. 'This isn't fair pricing or competitive pricing. It's predatory pricing. I won't let them get away with this.' But the company disputes the idea that there's anything unfair about its use of AI to price fares, telling Fortune magazine, 'Our fares are publicly filed and based solely on trip-related factors like advance purchase and cabin class, and we maintain strict safeguards to ensure compliance with federal law.' Dynamic pricing is highly controversial and can lead to some intense backlash. When news broke back in early 2024 that Wendy's was thinking about introducing surge pricing—making food items more expensive during certain times of the day—it backed off the plan almost immediately. Will Delta face the same backlash? That seems likely, given the subsequent outrage you can see on social media. But that doesn't mean Delta will be as responsive to the negative publicity. Delta makes a significant portion of its revenue from its partnership with American Express, meaning it's less sensitive to people griping about the penny-pinching nightmare that is flying in the 21st century. Or, as the Atlantic put it in an article from 2023, airlines are just banks now. And banks don't really care if you think they're out to just make money without regard for their customers' feelings.
