Delta Airlines is now using AI for airfare pricing, spearheading a new technology that could become the norm for the future of travel technology. For 30 years Delta has used dynamic pricing alongside most other major airlines. This method pushes airfares up and down based on holidays and consumer demand.
The use of AI pricing could mean prices are not subject to as much regulation, and your own identity could influence the price you see for a flight. Delta claims the switch to AI will eliminate manual processes, while improving analysis and ensuring all customers see the same airfares, according to Reuters.
Delta plans to use AI to determine 20% of ticket prices by the end of 2025. As of right now, around 3% of the airline’s fares are AI-rendered, according to what Delta president Glenn Hauenstein told investors this month.
Delta’s new AI system belongs to Israeli parent company Fetcherr, and it is said to personalize prices based on the consumer it serves. This essentially means Delta’s AI can collect data on the consumer to give a price, and a lot of data could be up for grabs, including consumer booking history, loyalty status, competitor pricing, weather and even browsing behavior.
AOL reports legal protections against this invasive process exist, but are “limited.” Currently, federal laws prevent airlines from charging varied rates based on sex, gender, or ethnicity. However, lack of access to public record on all available fares makes it hard to hold the company accountable for using personal information in shift pricing.
Delta has received pushback from some Democratic senators: “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,” said Senators Ruben Gallego, Mark Warner, and Richard Blumenthal in a letter this week, according to Reuters. Despite concerns, Delta maintains that they will not use personal information for dynamic pricing, according to statements to Business Insider.
Delta has used questionable pricing methods before, being one of a handful of major airlines to hike up airfares for solo travelers early this year. Gallego has called the new method “predatory,” and warns it will likely lead to price-gouging, but there are still many questions concerning what’s at stake for consumer data privacy.
For now, frequent travelers can try booking with different airlines, peruse airfares on incognito browsing mode, and compare prices across multiple booking platforms before deciding on a flight.
