Delta Air Lines Clarifies How It’s Using AI To Determine Airfare Prices

Delta Air Lines recently set the record straight regarding its plans for artificial intelligence (AI) impacting customers’ airfare rates.

The carrier addressed the controversial new pricing method it’s testing in a July 31 letter. It said that the AI it’s piloting to inform its pricing model doesn’t base fares on consumers’ personal data. Delta said it designed the AI to enhance existing fare pricing processes and to inform the analysts who fine-tune its ticket pricing recommendations. Additionally, the carrier said it’s not sharing any of consumers’ personal information with Fetcherr. The latter is the developer of the AI fare-pricing technology that the carrier is using.

Delta addressed the letter to three senators concerned about the carrier’s implementation of AI in its airfare pricing model. The senators were Ruben Gallego (D-AZ), Richard Blumenthal (D-CT), and Mark Warner (D-VA).

“There is no fare product Delta has ever used, is testing, or plans to use that targets customers with individualized prices based on personal data,” the carrier’s letter stated. “To be clear, Delta’s ticket prices are dictated by market dynamics and vigorous competition.”

“Given the tens of millions of fares and hundreds of thousands of routes for sale at any given time, the use of new technology like AI promises to streamline the process by which we analyze existing data and the speed and scale at which we can respond to changing market dynamics,” the carrier added.

What Else Should I Know About Delta Air Lines’ Stance On AI Ticket Pricing?

AI-driven personalized pricing can be problematic if it unfairly charges consumers based on their personal circumstances. Those instances could lead to predatory or discriminatory pricing.

The airline industry has historically set airfare ticket prices based on several factors. They include seasonal demand, competitor pricing and schedules, weather, jet fuel costs, and more.

According to CNBC, last December, Delta’s President Glen Hauenstein shed insight on the capabilities of the carrier’s AI. Hauenstein allegedly noted that the AI’s prediction is based on “the amount people are willing to pay for the premium products related to the base fares.”

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