Delta Air Lines Breaks Silence on Controversial Pricing Change
Earlier this week news broke that Delta Air Lines doubled down on its plans to use an AI system to dynamically set ticket pricing.
The airline said it plans to deploy AI-based revenue management technology across 20 percent of its domestic network by the end of 2025 in partnership with Fetcherr, an AI pricing company. Delta Air Lines currently uses the platform for 3 percent of its domestic flights.
"We like what we see, we like it a lot, and we're continuing to roll it out," Delta's president said during a recent investor call.
What Do Experts Say About the Change?
Clint Henderson with the travel website ThePointsGuy.com claimed integrating artificial intelligence takes the dynamic pricing model up to 11.
"Airlines already have a huge team of revenue managers who are looking to see what demand is like in different markets, what days of the week they should raise, when they should lower prices, how fare buckets are selling or not selling, and adjusting prices accordingly," Henderson said. "So instead of having ten humans doing pricing, they'll have a machine doing it for them."
Meanwhile, just 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 would “likely mean fare price increases up to each individual consumer’s personal ‘pain point.'”
Delta's Response to the Uproar
In a response to the senators, Delta Air Lines made it clear the airline isn't taking the personal data from customers in an effort to offer more dynamically priced tickets.
“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 company said, via Reuters.
“Furthermore, we have zero tolerance for discriminatory or predatory pricing and fully comply with applicable laws in privacy, pricing and advertising. Our Al-powered pricing functionality is designed to enhance our existing fare pricing processes using aggregated data. This technology is a decision-support tool that simply provides informed insights for our analysts, who oversee and fine-tune the recommendations to ensure they are consistent with our business strategy.”
Related: Southwest Airlines Announces Change on All Flights Starting August 13