Delta has fired back at claims that the company uses artificial intelligence to set flight prices after three Democratic U.S. senators, Ruben Gallego (Arizona), Mark Warner (Virginia), and Richard Blumenthal (Connecticut), publicly challenged the organization’s AI pricing strategy.
"There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized prices based on personal data," the airline said in a statement released on August 1. "Our ticket pricing never takes into account personal data."
However, Senator Gallego wasn’t fully convinced by Delta’s response.
“Delta is telling their investors one thing, and then turning around and telling the public another,” Gallego said in response. "If Delta is in fact using aggregated instead of individualized data, that is welcome news."
The original claims that the airline was using customers’ personal data in combination with AI to determine prices first surfaced in July. Gallego, Warner and Blumenthal penned a letter to Delta CEO Ed Bastian, writing, “We write with concern regarding Delta’s plan to expand the use of artificial intelligence to set individualized fares.”
The letter continued, “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. 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.”
Dynamic pricing isn’t new, and airlines have used it for decades. Traditional fare-setting models adjust prices based on factors like seat availability, day of the week and more. These systems rely on human analysts and rule-based algorithms to shift fares in real time. However, adding AI into the equation raises concerns, because critics are nervous that models could eventually learn to charge people different prices based on their behavior.
Delta insists it’s playing by the rules, but it appears not everyone is convinced just yet.
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