AI Technology Takes Off in Airline Pricing
Delta Air Lines is turning to artificial intelligence to refine its flight pricing strategy, using generative AI developed by Fetcherr to set fares on select domestic routes. Currently applied to about 3% of flights, Delta aims to expand this approach to 20% of its network by the end of the year. The system, still undergoing testing, is designed to optimize pricing based on real-time market conditions and historical data.
Fetcherr, an Israeli tech firm recognized at the World Travel Tech Awards, claims its platform helps airlines maximize revenue and personalize offers. Alongside Delta, it also works with other carriers including Virgin Atlantic and WestJet.
Lawmakers Sound the Alarm on Surveillance Pricing
Delta’s AI-driven pricing model has sparked criticism from U.S. lawmakers, who warn it could cross into unethical territory. Senators Ruben Gallego, Mark Warner, and Richard Blumenthal sent a letter to Delta’s CEO expressing concerns about potential data privacy violations and individualized pricing that targets passengers based on their perceived willingness to pay.
The letter likened the system to surge pricing used by ride-share companies and highlighted fears that personal data such as web browsing behavior or financial status could be used to inflate ticket prices. The lawmakers emphasized the risks of opaque AI practices, especially if they allow airlines to exploit emotionally vulnerable passengers or manipulate fares without transparency.
Delta Denies Use of Personal Data in Pricing
In response to the backlash, Delta insisted that its pricing system does not incorporate any individual customer data. The airline stated that all fare decisions are guided by standard market forces and that it remains compliant with regulatory frameworks around pricing disclosures. Delta reiterated its position in a follow-up letter to the senators, stating that personal data plays no role in the company’s dynamic fare model.
Delta’s representatives emphasized that the AI tool enhances revenue management without violating consumer privacy norms, pointing to the airline industry’s long-standing reliance on dynamic pricing systems.
Consumers May Still Have the Final Say
Travel experts suggest that public perception and market behavior could influence how far AI pricing spreads. Katy Nastro, spokesperson for travel deal platform Going, noted that if customers find Delta’s prices too steep or opaque, they may shift to other carriers. This competitive pressure could ultimately lead to fare adjustments or discounts to retain travelers.
The broader concern, however, centers on transparency. Critics argue that without clear information about how AI fares are calculated, consumer trust may erode, especially when deployed by premium carriers like Delta. As AI tools evolve and take on more significant roles in pricing strategies, the balance between innovation, fairness, and privacy will remain under scrutiny.