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Daily Mail
7 hours ago
- Business
- Daily Mail
Fury as Delta rolls out sinister new tool to ensure it gets away with the highest possible fares
Delta Air Lines is under fire from lawmakers who say the carrier's new AI ticket-pricing plans could mean higher fares for ordinary Americans already buckling under rising costs. America's second-largest US airline by daily flights says it's expanding a pilot program that uses computers to help set fares. By the end of the year, 20 percent of all fares will be set AI in partnership with Fetcherr, a pricing company. Democratic senators Ruben Gallego, Mark Warner and Richard Blumenthal fired off a letter to Delta CEO Ed Bastian demanding to know if its AI tools are designed to hike fares up to each passenger's personal 'pain point.' A Delta exec previously boasted the system can predict 'the amount people are willing to pay for the premium products related to the base fares,' sparking fears of a digital price squeeze. Delta insists it isn't using personal data to target individual passengers, saying dynamic pricing has been standard for decades and that 'all customers see the same fares and offers in all retail channels.' The airline says AI is only being tested to forecast demand, factor in thousands of market variables in real time, and speed up manual pricing adjustments. It's not the first AI pricing storm to hit the airline industry. Back in January, Blumenthal and other lawmakers grilled Frontier and Spirit over alleged seat fee manipulation, but the low-cost carriers never answered. Delta said it is using AI tools to figure out how much each customer is willing to pay to get on their flights 'This is a full reengineering of how we price and how we will be pricing in the future,' Glen Hauenstein, Delta's president, said during a June 10 earnings call. 'We like it a lot, and we're continuing to roll it out.' Consumer advocates are warning that the program could be 'predatory' for consumers and could spell the end of 'fair' pricing. If the tech lands smoothly, Delta says it could eventually hand over nearly all pricing decisions to its new digital co-pilot. Hauenstein said the AI is still in a 'heavy testing phase,' and reiterated the company will not rush the program out to its customers if issues arise. Airlines have long offered different prices for consumers, even for the same journey, based off factors including how far in advance they buy the ticket and whether they shop directly or with a comparison-shopping site. But AI is now supercharging changes to pricing models. 'AI isn't just optimizing business operations, but fundamentally rewriting the rules of commerce and consumer experience,' Matt Britton, author of Generation AI, told Fortune. 'For consumers, this means the era of 'fair' pricing is over. The price you see is the price the algorithm thinks you'll accept, not a universal rate.' The AI announcement comes as Delta made some major news about its profits forecast. Delta's CEO, Ed Bastian, said customers cut back on domestic economy seats amid economic uncertainty In April, the company pulled its financial guidance, saying the American economy was going through too much turmoil to determine how much money the company would make. Ed Bastian, the company's CEO, said consumer confidence 'certainly took a big dip in the early part of the year and then again in April, after the Liberation Day announcements were made.' But now the company has reinstated its profit guidance after it beat Wall Street's expectations for the second quarter of the year. Still, the company is facing some customer headwinds. Delta said that domestic economy seat sales fell 5 percent in the previous quarter. It will cut some domestic flights from the schedule in August.
CNBC
21 hours ago
- Business
- CNBC
Delta plans to use AI in ticket pricing draws fire from U.S. lawmakers
Three Democratic senators have pressed Delta Air Lines Ed Bastian to answer questions about the airline's planned use of artificial intelligence to set ticket prices, raising concerns about the impact on travelers. "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," Senators Ruben Gallego, Mark Warner and Richard Blumenthal wrote in a letter dated Monday and made public on Tuesday. The senators cited recent comments from Delta that the airline plans to deploy AI-based revenue management technology across 20% of its domestic network by the end of 2025 in partnership with Fetcherr, an AI pricing company. They said a Delta executive had earlier told investors the 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." The airline said in a statement: "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." Delta added that dynamic pricing has been used for more than three decades, in which pricing fluctuates based on a variety of factors like overall customer demand but not a specific consumer's personal information. Delta said AI technology for dynamic pricing is being tested to eliminate manual processes while accelerating analysis and adjustments and it emphasized all customers see the same exact fares and offers in all retail channels. Delta said it was testing AI for use in forecasting demand for specific routes and flights, adapting to market conditions in real-time, factoring thousands of variables simultaneously and learning from each pricing decision to improve future outcomes. In January, Blumenthal along with Senators Maggie Hassan and Josh Hawley asked Frontier Airlines ULCC.O and Spirit Airlines to disclose whether they were manipulating seat fees by using customers' personal information to charge different fees to passengers on the same flight. The senators said the airlines were apparently "using customers' personal information to charge different seat fees to passengers on the same flight" despite having the same fare. Frontier and Spirit did not immediately respond to requests for comment on their current practices on Tuesday.
Straits Times
a day ago
- Business
- Straits Times
Delta plans to use AI in ticket pricing draws fire from US lawmakers
Delta said AI technology for dynamic pricing is being tested to eliminate manual processes while accelerating analysis and adjustments. WASHINGTON - Three Democratic senators have pressed Delta Air Lines CEO Ed Bastian to answer questions about the airline's planned use of artificial intelligence to set ticket prices, raising concerns about the impact on travelers. 'Delta's current and planned individualised 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,' Senators Ruben Gallego, Mark Warner and Richard Blumenthal wrote in a letter dated Monday and made public on July 22. The senators cited recent comments from Delta that the airline 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. They said a Delta executive had earlier told investors the 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'. The airline said in a statement: 'There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualised offers based on personal information or otherwise.' Delta added that dynamic pricing has been used for more than three decades, in which pricing fluctuates based on a variety of factors like overall customer demand but not a specific consumer's personal information. Delta said AI technology for dynamic pricing is being tested to eliminate manual processes while accelerating analysis and adjustments and it emphasised all customers see the same exact fares and offers in all retail channels. Top stories Swipe. Select. Stay informed. Business Singapore's digital banks finding their niche in areas like SMEs as they narrow losses in 2024 World Trump says US will charge 19% tariff on goods from Philippines, down from 20% Singapore Two found dead after fire in Toa Payoh flat Singapore 2 foreigners arrested for shop theft at Changi Airport Opinion Most companies onboard wrong – here's how to get it right Life Ozzy Osbourne, Black Sabbath's bat-biting frontman turned reality TV star, dies aged 76 Singapore Singaporeans continue to hold world's most powerful passport in latest ranking Singapore Ports and planes: The 2 Singapore firms helping to keep the world moving Delta said it was testing AI for use in forecasting demand for specific routes and flights, adapting to market conditions in real-time, factoring thousands of variables simultaneously and learning from each pricing decision to improve future outcomes. In January, Mr Blumenthal along with Senators Maggie Hassan and Josh Hawley asked Frontier Airlines and Spirit Airlines to disclose whether they were manipulating seat fees by using customers' personal information to charge different fees to passengers on the same flight. The senators said the airlines were apparently 'using customers' personal information to charge different seat fees to passengers on the same flight' despite having the same fare. Frontier and Spirit did not immediately respond to requests for comment on their current practices on July 22. REUTERS
Business Times
a day ago
- Business
- Business Times
Delta plans to use AI in ticket pricing draws fire from US lawmakers
[WASHINGTON] Three Democratic senators have pressed Delta Air Lines CEO Ed Bastian to answer questions about the airline's planned use of artificial intelligence to set ticket prices, raising concerns about the impact on travelers. 'Delta's current and planned individualised 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,' Senators Ruben Gallego, Mark Warner and Richard Blumenthal wrote in a letter dated on Monday and made public on Tuesday. The senators cited recent comments from Delta that the airline 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. They said a Delta executive had earlier told investors the 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.' The airline said in a statement: 'There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualised offers based on personal information or otherwise.' Delta added that dynamic pricing has been used for more than three decades, in which pricing fluctuates based on a variety of factors like overall customer demand but not a specific consumer's personal information. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Delta said AI technology for dynamic pricing is being tested to eliminate manual processes while accelerating analysis and adjustments and it emphasised all customers see the same exact fares and offers in all retail channels. Delta said it was testing AI for use in forecasting demand for specific routes and flights, adapting to market conditions in real-time, factoring thousands of variables simultaneously and learning from each pricing decision to improve future outcomes. In January, Blumenthal along with Senators Maggie Hassan and Josh Hawley asked Frontier Airlines and Spirit Airlines to disclose whether they were manipulating seat fees by using customers' personal information to charge different fees to passengers on the same flight. The senators said the airlines were apparently 'using customers' personal information to charge different seat fees to passengers on the same flight' despite having the same fare. Frontier and Spirit did not immediately respond to requests for comment on their current practices on Tuesday. REUTERS
Axios
2 days ago
- Business
- Axios
Read: Senators raise alarm over Delta's AI pricing plan
Three Democratic senators wrote to Delta Air Lines CEO Ed Bastian Monday to raise concerns about company plans to use AI to set individualized fares, which the airline maintains won't target customers with offers based on personal details. Why it matters: Sens. Ruben Gallego (D-Ariz.), Mark Warner (D-Va.) and Richard Blumenthal (D-Conn.) wrote that Delta's personalized "current and planned individualized pricing practices" would present data privacy concerns and "likely mean" fare price rises "up to each individual consumer's personal 'pain point'" at a time when many families were struggling. Zoom in: "Consumers have no way of knowing what data and personal information your company and Fetcherr plan to collect or how the AI algorithm will be trained," wrote the senators, in reference to the Israeli company that developed a Generative Pricing Engine tool. "Prices could be dictated not by supply and demand, but by individual need," they added. "While Delta has stated that the airline will 'maintain strict safeguards to ensure compliance with federal law,' your company has not shared what those safeguards are or how you plan to protect American families against pricing discrimination in the evolving AI landscape." What they're saying:"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," a Delta spokesperson said in an emailed statement late Monday. "A variety of market forces drive the dynamic pricing model that's been used in the global industry for decades, with new tech simply streamlining this process. Delta always complies with regulations around pricing and disclosures."
