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Delta defends use of AI for flight pricing amid scrutiny over fairness and privacy

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Delta defends use of AI for flight pricing amid scrutiny over fairness and privacy
Research
Webp ed
Ed Bastian, Chief Executive Officer | Delta Air Lines

Delta Air Lines' recent use of artificial intelligence (AI) to help set flight prices has drawn attention from lawmakers, industry analysts, and travelers. The airline confirmed that it began using AI on about 3% of its domestic routes, with plans to expand the technology to nearly 20% of its network by the end of 2025.

Delta explained that the AI tool, developed in partnership with Israeli tech company Fetcherr, automates parts of the fare-setting process. Traditionally, airlines have relied on a mix of human analysts and algorithms to adjust fares based on factors such as demand, competition, and travel dates. Delta described its new system as a "super analyst" capable of making continuous pricing suggestions.

The move has not gone unnoticed in Washington. A letter from Congress accused Delta of using "individualized" and "surveillance" pricing—a claim the airline called "incorrect." Delta stated that its AI recommendations are based only on broad data like booking trends and fuel prices, not personal information.

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Some experts believe this technology could lead to higher average fares over time. Kerry Tan, an expert in airline revenue management at Loyola University Maryland, said: "Passengers can anticipate to pay higher prices, on average. Ultimately, this is Delta's attempt to better estimate customers' willingness to pay for flights."

Analysts also expect more frequent price fluctuations as AI allows airlines to respond quickly to market changes. This could mean both higher fares during peak demand and occasional discounts when trying to fill empty seats.

Privacy concerns remain a point of debate. Airlines collect significant customer data through loyalty programs and bookings. Henry Harteveldt, president of Atmosphere Research Group, commented: "But the concern — the very real concern — is that if Delta does then use data that they have, like zip codes... They have no right to charge you more because you live on the Upper West Side of Manhattan any more than they could charge you more if you lived in Greenwich, Connecticut, versus Harlem. They can't do that."

Delta maintains it does not personalize fares for individual customers or use sensitive personal data in setting prices. Peter Carter, chief external affairs officer at Delta Air Lines, wrote: "Furthermore, we have zero tolerance for discriminatory or predatory pricing."

Secretary of Transportation Sean Duffy indicated he was satisfied with Delta's assurances but promised close oversight: "I'll take them at face value," Duffy said while pledging that his department would act if evidence emerged of individualized pricing tactics.

Despite these reassurances from both regulators and the airline itself, some lawmakers remain skeptical about how much customer data could influence future airfare models. Senator Mark Warner questioned: "If the AI tool does know that you bought a Taylor Swift ticket or found out that your grandmother died, how do you prevent that from going into the pricing model? My feeling is Delta got kind of got caught with their hands in the cookie jar."

Travelers are advised to set price alerts using tools like Google Flights and monitor fares closely due to expected volatility in ticket prices. Booking flexible tickets may allow passengers to benefit from post-purchase price drops—though this generally excludes basic economy fares.

Industry observers suggest flexibility with travel dates and destinations remains key for finding lower fares as airlines continue refining their dynamic pricing strategies.

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