Three Democratic senators are pressing Delta CEO Ed Bastian for more information about the carrier’s use of artificial intelligence in setting online ticket prices.
“Individualized pricing, or surveillance-based price setting, eliminates a fixed or static price in favor of prices that are tailored to an individual consumer’s willingness to pay,” Sens. Ruben Gallego, Richard Blumenthal, and Mark Warner wrote in a letter sent to Bastian on Monday. “Delta’s current and planned individualized pricing practices not only present data privacy concerns, but will also likely mean fare price increases up to each individual consumer’s personal ‘pain point’ at a time when American families are already struggling with rising costs.”
The lawmakers drew attention to Delta’s partnership with technology company Fetcherr, which specializes in AI-driven pricing and inventory management for airlines. Individualized pricing uses “extensive” personal information as it is, they noted, and a model powered by AI could eventually become invasive and exploitative.
The senators referred to concerns raised by former Federal Trade Commission Chair Lina Khan, who said airlines could one day use AI to charge a higher fare for a customer “because the company knows that they just had a death in the family and need to fly across the country.”
“The opacity surrounding Delta’s new customized pricing model could aggravate these concerns,” the letter read. “Consumers have no way of knowing what data and personal information your company and Fetcherr plan to collect or how the AI algorithm will be trained. Prices could be dictated not by supply and demand, but by individual need. While Delta has stated that the airline will ‘maintain strict safeguards to ensure compliance with federal law,’ your company has not shared what those safeguards are or how you plan to protect American families against pricing discrimination in the evolving AI landscape.”
Growing Concerns
The senators issued a list of questions asking how Delta trains its AI model, how many passengers are currently buying tickets priced by AI, and how the carrier plans to increase its use of the technology. They also want to know what Delta routes will be affected and if the airline is targeting specific customer access points, such as the Fly Delta mobile app or airport kiosks, for enhanced testing.
The letter said Bastian has until Aug. 4 to reply.
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.
During the carrier’s July 10 earnings call, President Glen Hauenstein said AI is now being used to price about 3% of domestic flights. That figure is expected to reach 20% by the end of the year.
“We’re in a heavy testing phase,” he said. “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 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.
