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Daily Mail
17-07-2025
- Business
- Daily Mail
Delta Airlines shifts to AI-driven pricing strategy
Published: | Updated: Delta Airlines is letting AI take the controls — for pricing, that is. America's second-largest US airline by daily flights says it's expanding a pilot program that uses generative AI to help set fares. So far, just 3 percent of tickets have been priced with help from the bots. But consumer advocates are warning that the program could be 'predatory' for consumers and could spell the end of 'fair' pricing. The AI fare model has a projected runway of 18 to 24 months before a full-scale launch. 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. But, if successfully rolled out, the pricing model could represent a major departure from the traditional model used by the company for years. Delta previously relied on fixed and fair pricing models, where customers in similar seats largely paid the same price. Tickets were mostly determined by shared flight metrics like time, fuel prices, route, and demand. Executives believe the new system will strike a smoother balance between customer budgets and airline profitability. But it might also make passengers in the same aisle pay wildly different prices. 'It's all about giving people more choice, more pricing options, and more products and services in every cabin,' Hauenstein said. But others are warning that this pricing model could be harmful for consumers. Arizona Democratic Senator Ruben Gallego called the practice 'predatory pricing,' adding, 'I won't let them get away with this.' '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.' Delta declined to comment on this article. The AI announcement comes as Delta made some major news about its profits forecast. 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. At the time, Congress hadn't passed President Donald Trump's tax and spending bill, tariffs were still up in the air, and markets were balking at uncertainty. 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.
Daily Mail
17-07-2025
- Business
- Daily Mail
Delta makes major seat pricing change as airline ends 'fair' pricing practices
Delta Airlines is letting AI take the controls — for pricing, that is. America's second-largest US airline by daily flights says it's expanding a pilot program that uses generative AI to help set fares. So far, just 3 percent of tickets have been priced with help from the bots. But executives say they're speeding up the program's runway, and expect computers will set 20 percent of all ticket prices by year's end. 'This is a full reengineering of how we price and how we will be pricing in the future,' Glen Hauenstein, the airline's president, said during a June 10 earnings call. 'We like it a lot, and we're continuing to roll it out.' But consumer advocates are warning that the program could be 'predatory' for consumers and could spell the end of 'fair' pricing. The AI fare model has a projected runway of 18 to 24 months before a full-scale launch. 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. But, if successfully rolled out, the pricing model could represent a major departure from the traditional model used by the company for years. Delta previously relied on fixed and fair pricing models, where customers in similar seats largely paid the same price. Tickets were mostly determined by shared flight metrics like time, fuel prices, route, and demand. Executives believe the new system will strike a smoother balance between customer budgets and airline profitability. But it might also make passengers in the same aisle pay wildly different prices. 'It's all about giving people more choice, more pricing options, and more products and services in every cabin,' Hauenstein said. But others are warning that this pricing model could be harmful for consumers. Delta's new pricing model could completely change how it assigns prices per customer Delta's CEO, Ed Bastian, said customers cut back on domestic economy seats amid economic uncertainty The company said that arund three percent of its sale prices are influenced by AI - customers should expect a major uptick in AI use later this year Arizona Democratic Senator Ruben Gallego called the practice 'predatory pricing,' adding, 'I won't let them get away with this.' 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.' Delta declined to comment on this article. The AI announcement comes as Delta made some major news about its profits forecast. 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. At the time, Congress hadn't passed President Donald Trump's tax and spending bill, tariffs were still up in the air, and markets were balking at uncertainty. 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 5percent in the previous quarter. It will cut some domestic flights from the schedule in August.
Washington Post
09-06-2025
- Business
- Washington Post
Shoppers are wary of digital shelf labels, but a study found they don't lead to price surges
Digital price labels, which are rapidly replacing paper shelf tags at U.S. supermarkets, haven't led to demand-based pricing surges , according to a new study that examined five years' worth of prices at one grocery chain. But some shoppers, consumer advocates and lawmakers remain skeptical about the tiny electronic screens, which let stores change prices instantly from a central computer instead of having workers swap out paper labels by hand.
Irish Times
21-05-2025
- Automotive
- Irish Times
Beware the hire car honeytraps this summer – my personal contest of wills came down to a tiny scrape on the rear spoiler
Consumer advocates are, not for the first time, calling out hire car companies for aggressive selling tactics and poor customer communication, especially when it comes to triggering expensive insurance excesses for alleged damage at the end of your holiday. This correspondent recently had a somewhat bruising experience with one hire car company, while travelling in France . Having booked a car (Peugeot 308 or similar ...) through a special offer with via Enterprise Rent-a-Car , we rocked up at the airport to find some good news. For once, the 'or similar' played in our favour, as instead of the relatively compact 308 hatchback, we were given a larger, comfier Citroen C5 – one of this writer's favourite cars – instead. READ MORE However, on arrival, two things were clear. First, the darkness (we arrived after 10pm local time) and the pelting rain meant that we couldn't properly examine the car for dents and scrapes, even though it was obvious from what light there was that the big Citroen was already replete with the scars of hard-working hire car life. No problem, the agent assured me – he would send out an email with photos of the car confirming all of the damage. The fact that that email never arrived should have made my antennae twitch, but I was already in holiday mode. I told the staff at the car collection booth that I wouldn't need their expensive damage insurance cover as I had already purchased my own damage excess insurance, which is precisely what you're supposed to do, and it's recommended by every major consumer advocate. The full damage cover sold to you by the hire car company can be expensive. In the case of my own rental, it would have doubled the cost of hiring the car. Instead, I purchased my own cover, which would pay off the excess charged if I damaged the car, and it only cost me €35 for the week. As became clear later, I should possibly never have mentioned this to the hire car staff. A pleasant week in France rolled by, we racked up lots of lovely, comfy mileage in the Citroen, and I thoroughly enjoyed driving the beautiful, winding roads of the Pyrenees secure in the knowledge that if I made a mistake and damaged the car, I would be covered. However, I was careful, and I know that I never nudged nor scuffed the car against anything. Upon our return to the airport – now in the bright sunlight of the early evening – 'our' Citroen was subjected to the most intensive inspection of a returned rental car I've ever seen. Generally, car hire companies have a quick look around to make sure that you've not obviously damaged the car, check that you've refilled the tank, and then wave you on your way. This time was very, very different. It became clear that if any problem would be found, the insurance excess – €1,500 – would be charged to my credit card. I would then have to recoup that cost from my own insurers. However, I stood my ground. I knew that I hadn't damaged the car, and the contest of wills came down to a tiny scrape on the rear spoiler, about the size of a child's fingernail. It hadn't been listed on the original, lengthy, roster of damage to the car, but given that I had collected the car in the dark and rain, and had never been sent the original images, I managed to weasel out of any responsibility and eventually managed to get Enterprise to close the hire contract with no extra charges. It took some arguing, though. As it turns out, I'm far from alone, and consumer experts are saying that car rental agencies can put – budget airline style – far too much pressure on customers to take out expensive extras when hiring. According to the Competition and Consumer Protection Commission (CCPC), Ireland's consumer watchdog: 'This is an area of concern for the CCPC. Consumers can be particularly vulnerable when renting cars – stuck for time, communicating in a different language or, like yourself, collecting or returning a car in the dark and/or in bad weather. 'Consumer issues with car hire are quite common, and issues can be complicated by the consumer being based in a different country than the car hire business. Before booking with a car rental company, always read the terms and conditions of the rental agreement to understand what fees you may be charged and in what circumstances you should be charged.' [ Q&A: Essential guide to booking car hire and travel insurance for your holiday Opens in new window ] Last year, the CCPC, as part of its work with the European Consumer Protection Co-operation Network, required hire car provider to remove certain misleading information and to amend other unclear information on its platform. This followed a European Commission-co-ordinated sweep of 78 car-rental websites by consumer authorities in 11 countries, including the CCPC. Such sweeps and actions may not go far enough, though. The Irish Times spoke with consumer advocates Which?, who told us that hire car companies are, in spite of instruction to the contrary, still piling the pressure on to consumers when it comes to insurance cover and other extras. If you spot any damage that's not listed on the car's rental agreement, make sure you flag it up with staff before you go. Yes, that's boring and time-consuming stuff when you just want to get to your hotel, but you could be saving yourself a lot of aggravation later on Which's investigations last year found that some hire car companies were, in locations in Spain, using 'sneaky tactics to upsell insurance at the car rental desk despite us showing their desk staff our perfectly adequate excess reimbursement insurance'. Which? also found that hire car providers were using 'misleading or aggressive practices that are likely to lead customers to make a purchase they wouldn't have otherwise made.' The Which? team said: 'Staff across the industry employ these pressure tactics to improve their firm's bottom line and to line their own pockets. An industry insider told us that most companies incentivise staff, paying commission for any extras they convince us to buy. Whether that's the motive of the staff we encountered in Spain is unclear.' Some staff even tried to convince the Which? secret shoppers that their hire car wasn't covered at all – a blatant lie, given that European Union regulations demand that basic collision damage cover is included as standard in all rental agreements. What you're being asked to pay extra for is the company's overpriced damage insurance, which covers you against any extra bumps or scrapes. In theory, these should only be bumps and scrapes which you have caused during your time with the car. In practice, this is a far more murky process. Essentially, hire car firms work on a similar low-margin, high-volume model as the airline that brings you to your holiday destination, so they are eager to add on any extras they can sell you over and above the price you've already agreed. When it comes to the insurance excesses charged for damage, an excess of well over €1,000 can be charged to your credit card for even a tiny scrape, which actually may cost less than €100 to fix. Equally, the dented and scraped condition of our Citroen hire car shows that such repairs are often not even carried out. In our specific case, we were not pressured to buy extra cover at the time of collection, other than the usual 'would you like to ...' but possibly our mentioning at the time of having taken out our own excess cover may have given Enterprise's staff the green light to put pressure on us at the end of the rental to agreeing to pay the hefty excess. The Irish Times asked Enterprise if its employees or franchised agents are given bonuses or commissions if they can find sufficient fault with a car to trigger the payment of such an excess. A spokesperson responded by saying: 'Our rental employees do not receive a financial incentive or bonus for sales of excess protection or to find damage. 'Existing damage on a vehicle, beyond wear and tear, is detailed on the rental agreement, which is emailed to the customer at the start of the rental. Our inspection process is standard for all vehicles. 'Any change of condition during a rental is assessed against our own wear and tear standards using our damage evaluator tool. The customer should also confirm the condition of the vehicle at the point of rental. 'However, when conditions or circumstances make this difficult, reasonable consideration will be given to early notification of damage after the vehicle has been rented. We include collision damage waiver [CDW] in the rental fee, but also offer customers additional protection products, such as excess protection, to reduce the excess on the CDW. Full details of our protection products and terms and conditions are available on our websites throughout the booking process.' The Irish Times also spoke to Cover4Rentals, the company from which we had purchased our excess cover insurance. Their advice? Keep quiet about your cover. 'Your experience isn't uncommon. Having gathered feedback from over 5,300 car rental customers, 35.1 per cent told us that they felt they had been charged for damage they didn't cause,' Cover4Rentals co-founder, Jon Rebuck told The Irish Times. 'There's no need to tell the hire company that you've arranged your own cover. A rental car excess insurance policy is a reimbursement policy, so in the event you are charged the excess, you know you're covered and can claim the money back. 'When you're offered the rental company's own excess waiver just say 'Thanks, but no thanks'. 'Excess cover is an agreement between the customer and the insurer, and nothing to do with the hire company. You don't need to provide the rental company with the details of your excess insurance policy, because it does not affect your rental agreement with them.' The European Commission recently carried out a consumer protection co-operation case study on the car rental market, and its results make for dismal reading. It found that '10 per cent of survey participants reported having experienced problems with car rental service providers where they felt they had a legitimate cause to make a complaint. Thinking back about their most recent problem, 43 per cent reported having experienced financial loss as a result of the problem and 76 per cent reported having experienced a non-financial impact,' said the report. 'In addition, only 63 per cent made a complaint, among which only 54 per cent were satisfied with the outcome of the complaint. This suggests both the difficulty that consumers experienced in using the complaint mechanisms as well as a potential lack in the effectiveness of the complaint mechanism to arrive at a satisfactory outcome.' The Spanish Organisation of Consumers and Users (OCU) has also undertaken surveys of car hire firms, and found similar shortcomings. An OCU spokesperson said: 'It's true that frequently the car rental companies try to charge the reparation cost of damages, even if they have not been caused by the last driver. 'In the OCU legal advisory we received more than 300 complaints about car rental companies over the past year, which meant an increase in complaints that has caught our attention. The problem of the return of the deposit and the claim for damages, unfortunately, is increasingly common. For car rental companies, it seems that the maxim that at first all damage that the car presents is the responsibility of the renter, without giving you the benefit of the doubt, is becoming the general rule.' So what's the best advice? Well, don't be as dumb as I was – try to avoid collecting your car in the dark and the rain, and make sure you give it a thorough inspection, taking plenty of clear, sharp photos with your phone, before you leave the rental car park. If you spot any damage that's not listed on the car's rental agreement, make sure you flag it up with staff before you go. Yes, that's boring and time-consuming stuff when you just want to get to your hotel, but you could be saving yourself a lot of aggravation later on. It's probably also best not to mention that you have taken out your own insurance excess cover when you're refusing the hire car agent's blandishments of their own-brand insurance. Do, however, definitely take out that personal insurance excess cover as it means a saving of at least a couple of hundred euro on your rental. Just box as clever as possible when it comes to collecting the car and noting whatever damage it already has.
