US lawmakers question Delta Air Lines over AI-driven ticket pricing

Delta President Glen Hauenstein mentioned in a July 10th earnings call that AI is being tested to assess how much people are willing to pay for premium products related to base fares. However, Delta clarified: "Delta has never used, is testing, or intends to use any fare product that targets customers with individualized offers based on personal information or otherwise."

Senators Ruben Gallego, Mark Warner, and Richard Blumenthal expressed their concerns in a public letter stating: "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 senators warned that using AI-powered "surveillance pricing" might involve extensive personal information such as location, social media activity, purchase history, biometrics, and financial data. They emphasized consumers' lack of awareness regarding the data collection by Delta and Fetcherr or the methods used for training algorithms. Additionally, they noted Delta has not disclosed measures against price discrimination.

According to Delta, AI technology is under evaluation for dynamic pricing aimed at expediting analysis and changes while eliminating human processes. The airline emphasized uniformity in prices across all retail channels.

The trials conducted by Delta aim at predicting demand for specific flights and routes while adjusting in real-time according to market conditions. The objective is process optimization through consideration of multiple variables simultaneously and learning from each price decision for future improvement.