After some early testing, Delta is looking to ramp up the deployment of artificial intelligence tools to set online ticket prices.
During a July 10 earnings call, Delta President Glen Hauenstein said the airline is continuing to work with Israeli technology firm Fetcherr to leverage “AI-enhanced pricing solutions.” The results so far have been promising, Hauenstein added, and the near-term plan is to have AI guiding ticket prices for one-fifth of all domestic flights.
“Today, we’re about 3% of domestic,” he said. “Our goal is to have about 20% by the end of the year. And that’s a goal. I mean, we can report back on what the actual numbers are, but you have to train these models as you might expect and you have to give it multiple opportunities to provide different results.”
“So, we’re in a heavy testing phase,” he continued. “We like what we see. We like it a lot and we’re continuing to roll it out. But we’re going to take our time and make sure that the rollout is successful, as opposed to trying to rush it and risk that there are unwanted answers in there. So, the more data it has and the more cases we give it, the more it learns.”
Delta is the first U.S. airline to publicly disclose that it is using AI for dynamic pricing. It made the announcement at its Investor Day in November, when about 1% of the carrier’s network was being priced by Fetcherr tools.
“We’ve started this and I’d say what we have today with AI is we have a super analyst,” Hauenstein said at the time. “We have an analyst that’s working 24/7, 24 hours a day, 7 days a week. And trying to simulate, given the same inputs that an analyst sees today, real-time, what should the price points be. And that output is different than what we have in the market. And so we’re letting the machine tell us, actually, go ahead and price in a very controlled environment.”
The use of AI to set prices would mean that customers shopping for airline tickets would not see a universal rate but a price the model determines they will likely accept. While differentiated pricing is allowed under federal law, it has still attracted criticism from some consumer protection advocates and elected officials.
“This isn’t fair pricing or competitive pricing,” Senator Ruben Gallego wrote on X on Tuesday. “It’s predatory pricing.”
Delta officials have said the implementation of AI-informed pricing will be a “multi-year, multi-step process,” with controls in place to protect the customer experience.
