Delta Air Lines said Friday it is going to not use artificial intelligence to set personalized ticket prices for passengers after facing sharp criticism from lawmakers.
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 might “likely mean fare price increases as much as each individual consumer’s personal ‘pain point.’”
Delta has said it plans to deploy AI-based revenue management technology across 20% of its domestic network by the top of 2025 in partnership with Fetcherr, an AI pricing company.
“There is no such thing as a fare product Delta has ever used, is testing or plans to make use of 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 consideration personal data.”
The senators cited a comment in December by Delta President Glen Hauenstein that the carrier’s AI price-setting technology is able to setting fares based on a prediction of “the quantity individuals are willing to pay for the premium products related to the bottom fares.”
Last week, American Airlines CEO Robert Isom said using AI to set ticket prices could hurt consumer trust.
“This isn’t about bait and switch. This isn’t about tricking,” Isom said on an earnings call, adding “speak about using AI in that way, I don’t think it’s appropriate. And positively from American, it’s not something we are going to do.”
Delta said airlines have used dynamic pricing for greater than three a long time, through which pricing fluctuates based on quite a lot of aspects like overall customer demand, fuel prices and competition but not a particular consumer’s personal information.
“Given the tens of thousands and thousands of fares and a whole bunch of 1000’s of routes on the market at any given time, using recent technology like AI guarantees to streamline the method by which we analyze existing data and the speed and scale at which we will reply to changing market dynamics,” Delta’s letter said.
It added that AI can “assist our analysts with pricing by reducing manual processes, accelerating evaluation and improving time to marketplace for pricing adjustments.”
