US Legislators Criticize Potential AI Use in Customized Airline Ticket Pricing
Delta Air Lines is at the forefront of using artificial intelligence (AI) for personalised dynamic ticket pricing, currently covering 3% of fares and aiming to increase that share to around 20% by the end of 2025.
The airline partners with Fetcherr, an Israeli AI pricing startup that also serves airlines such as Azul, WestJet, Virgin Atlantic, and VivaAerobus. Fetcherr's technology adjusts fares based on aggregated demand and competitive data, enhancing real-time pricing precision.
Delta's AI pricing system analyses vast amounts of data in real-time to optimise pricing dynamically based on customer demand, market conditions, competitor pricing, and other variables. The aim is to maximise revenue by better estimating individual customers’ willingness to pay and adjusting prices more precisely and frequently than traditional static pricing.
However, Delta emphasises that their AI-driven pricing model does not target prices to individual consumers based on personal data such as identity or browsing history. Fares are filed publicly and are influenced by aggregated market and customer demand data, maintaining regulatory fare transparency. Customers can compare prices without logging into Delta’s platform.
Democratic lawmakers Greg Casar and Rashida Tlaib have introduced legislation to prohibit companies from using AI to set prices or wages based on Americans' personal data. If passed, the legislation would not explicitly mention Delta Air Lines, but United States Transportation Secretary Sean Duffy has promised to investigate any airline that uses artificial intelligence to set personalised airline prices.
American Airlines CEO Robert Isom expressed concerns last month about using AI to set ticket prices, suggesting it could harm consumer trust. American Airlines has not been mentioned as partnering with Fetcherr for AI pricing technology.
Delta Air Lines has stated that airlines have used dynamic pricing for more than three decades, with pricing fluctuating based on factors like overall customer demand, fuel prices, and competition, but not a specific consumer's personal information. If any company tries to use AI to individually price their seating, Duffy stated that Delta will engage strongly.
The proposed legislation specifically bans airlines from raising individual prices after seeing a search for a family obituary, emphasising the need for fair and transparent pricing practices. Democratic Senators Ruben Gallego, Mark Warner, and Richard Blumenthal previously believed that Delta Air Lines would use AI to set individual prices, which they suggested would result in fare price increases up to each individual consumer's personal 'pain point'.
In summary, Delta Air Lines leads the use of AI for personalised dynamic ticket pricing, currently covering 3% of fares and aiming for 20% in 2025. They use AI through a partnership with Fetcherr, which also serves several other airlines globally. AI pricing adjusts fares based on aggregated demand and competitive data, enhancing real-time pricing precision. Pricing remains transparent and not personalised to individual identity; it is regulated and publicly available. Other airlines are potentially exploring similar technologies, but Delta is the clearest example as of mid-2025.
- Despite Democratic lawmakers proposing legislation to prohibit companies from using AI to set prices or wages based on personal data, Delta Air Lines reassures customers that their AI-driven pricing model maintains regulatory fare transparency by not targeting prices to individual consumers based on personal data.
- The use of artificial intelligence (AI) in business, such as Delta Air Lines' partnership with Fetcherr, has become popular in areas like finance, investing, and economics, with AI systems like Fetcherr's technology adjusting fares based on aggregated demand and competitive data for increased revenue.
- The ongoing discussions about the ethical and fair use of AI in business, particularly in the airline industry, have emphasized the importance of industries like politics and economics in ensuring regulations are in place to protect consumers against possible price discrimination based on personal data, in light of real-time pricing optimization technologies and AI-driven systems being implemented.
