Delta Air Lines is facing increasing pressure from U.S. senators regarding its plans to significantly expand the use of artificial intelligence in determining ticket prices. The airline aims to set prices for 20% of its domestic network using AI by the end of 2025, a move that has ignited concerns over potential individualized pricing and consumer impact.
Senators Ruben Gallego, Mark Warner, and Richard Blumenthal have formally pressed Delta CEO Ed Bastian for details. Senator Gallego, in a recent social media post, warned that AI pricing could "squeeze each customer up to their personal 'pain point' - whatever it takes to make you pay before rage-quitting." The senators' letter underscored worries about data privacy and the potential for fare increases based on personal consumer profiles.
Delta, in response, has stated that its AI tools are designed for forecasting demand and adapting to market conditions, not for creating individualized offers based on personal information. The airline maintains that all customers will see identical prices. However, Delta President Glen Hauenstein previously indicated that the technology could predict what customers are "willing to pay," with one executive reportedly referring to an "exploitation phase" in the technology's deployment.
Currently, Delta utilizes AI to price approximately 3% of its domestic fares, a figure the airline intends to expand sevenfold by year-end. This initiative is being implemented in partnership with Fetcherr, an AI pricing company. Delta executives have noted "amazingly favorable unit revenues" from the initial testing phases of the AI system.
Consumer advocacy groups and lawmakers continue to express skepticism, citing concerns about the lack of transparency in AI-driven pricing. Critics warn that such systems could lead to higher prices for consumers and raise questions about fairness and potential discrimination. While Delta asserts it has "zero tolerance for discrimination" and bases fares on trip-related factors, the debate over the ethical implications of AI in pricing remains a focal point in Washington D.C.