American Airlines CEO Robert Isom waded into the growing debate around the use of artificial intelligence to determine airline ticket prices during an earnings call Thursday and appeared to knock a specific competitor in the process.
American executives were nearing the end of a media question-and-answer session when a reporter asked Isom how he felt about a rival airline – likely a reference to Delta – experimenting with AI-informed pricing, and if American had plans to do the same.
“I appreciate the question because, quite frankly, I think that some of the things I’ve heard are just not good,” he started.
Isom said American is already experimenting with artificial intelligence and plans to use the technology to improve operations and efficiency. It will also play a role in the customer experience, he added, and could be used to make passengers aware of new amenities, or to help them navigate a service disruption.
But using AI to manipulate prices, Isom said, would be a bridge too far.
“Of course we’re going to find ways to get our product in front of consumers,” he continued. “But consumers need to know that they can trust American. This is not about bait and switch. This is not about tricking. And others that talk about using AI in that way, I don’t think it’s appropriate, and certainly, for American, it’s not something we will do.”
Industry Rift
Delta has faced criticism from some segments of the flying public as well as lawmakers after President Glen Hauenstein delivered a glowing review of an early AI pricing system during an earnings call on July 10. The carrier is working with technology company Fetcherr to test and expand the AI program, which as of this month, was guiding prices for about 3% of Delta’s domestic network.
The airline plans to boost that figure to 20% by the end of the year.
“We’re in a heavy testing phase,” Hauenstein said on the call. “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.
The airline has said the implementation of AI-informed pricing will be a “multi-year, multi-step process,” with controls in place to protect the customer experience.
On Monday, three Democratic senators sent a letter to Delta CEO Ed Bastian seeking more information about the AI pricing system. The lawmakers asked 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.
