Delta's AI Pricing Controversy: Lawmakers Push Back as Airline Clarifies Stance

Delta's AI spying to "jack up" prices must be banned, lawmakers say

One week after Delta announced it is expanding a test using artificial intelligence to charge different prices based on customers' personal data -- which critics fear could end cheap flights forever -- Democratic lawmakers have moved to ban what they consider predatory surveillance pricing. In a press release, Reps. Greg Casar (D-Texas) and Rashida Tlaib (D-Mich.) announced the Stop AI Price Gouging and Wage Fixing Act. The law directly bans companies from using "surveillance-based" price or wage setting to increase their profit margins. If passed, the law would allow anyone to sue companies found unfairly using AI, lawmakers explained in what's called a "one-sheet." That could mean charging customers higher prices -- based on "how desperate a customer is for a product and the maximum amount a customer is willing to pay" -- or paying employees lower wages -- based on "their financial status, personal associations, and demographics." Tlaib called companies using AI to "exploit" workers in "desperate" situations "appalling," with the one-sheet specifically shaming delivery services that lower drivers' wages based on their "pattern of taking orders" and health care companies that base nurses' pay on "an algorithmically-manipulated-bidding war, not the tasks they perform." The lawmakers also called out Delta among companies whose AI pricing plans, advocacy groups warn, stand to worsen the US "affordability crisis" that currently sees many Americans struggling to afford basic items, like groceries. Delta has confirmed it plans to "set 20 percent of prices using AI by the end of the year," lawmakers noted. And other companies "engaging in surveillance-based price setting" include giants like Amazon and Kroger, as well as a ride-sharing app that has been "charging a customer more when their phone battery is low." Public Citizen, a progressive consumer rights group that endorsed the bill, condemned the practice in the press release, urging Congress to pass the law and draw "a clear line in the sand: companies can offer discounts and fair wages -- but not by spying on people." "Surveillance-based price gouging and wage setting are exploitative practices that deepen inequality and strip consumers and workers of dignity," Public Citizen said. AI pricing will cause "full-blown crisis" In January, the Federal Trade Commission requested information from eight companies -- including MasterCard, Revionics, Bloomreach, JPMorgan Chase, Task Software, PROS, Accenture, and McKinsey & Co -- joining a "shadowy market" that provides AI pricing services. Those companies confirmed they've provided services to at least 250 companies "that sell goods or services ranging from grocery stores to apparel retailers," lawmakers noted. That inquiry led the FTC to conclude that "widespread adoption of this practice may fundamentally upend how consumers buy products and how companies compete." In the press release, the anti-monopoly watchdog, the American Economic Liberties Project, was counted among advocacy groups endorsing the Democrats' bill. Their senior legal counsel, Lee Hepner, pointed out that "grocery prices have risen 26 percent since the pandemic-era explosion of online shopping," and that's "dovetailing with new technology designed to squeeze every last penny from consumers." Hepner pushed lawmakers to support the legislation banning AI surveillance pricing, suggesting that could help "restore fair, transparent, and predictable pricing." Otherwise, "there is no such thing as a good deal when every consumer is charged a different price," Hepner warned. For consumers and workers who may not even realize they've been subjected to AI spying, the law offers paths through their state, the FTC, and the Equal Employment Opportunity Commission to sue. Any violations could force companies to either pay back the difference in any unfair transactions that AI systems recommended or $3,000 -- whichever is higher. And willful violations could triple damages owed. "Giant corporations should not be allowed to jack up your prices or lower your wages using data they got spying on you," Casar said. "Whether you know it or not, you may already be getting ripped off by corporations using your personal data to charge you more. This problem is only going to get worse, and Congress should act before this becomes a full-blown crisis." It's unclear if the Democrats can win enough support from Republicans to pass the bill. Perhaps notably, Republican FTC commissioners voted against releasing the report outlining potential concerns with AI surveillance pricing and wage setting. In their dissent, commissioners Andrew Ferguson and Melissa Holyoak suggested the report was published prematurely, criticizing Biden's outgoing FTC for "nakedly" politicizing the agency and taking an "unprecedented" step in sharing preliminary summaries of findings. However, they did agree that when the final report is ready, the "American public and Congress will surely value what the Commission ultimately learns and shares as to whether and how consumers' private data may be used to affect their pocketbooks, especially as the future of our nation's privacy laws is being considered."

Delta denies using AI to come up with inflated, personalized prices

Delta spent July dealing with backlash over what the airline company claims is widespread public confusion over its AI pricing system. Now, Delta has finally come forward to break down precisely how the AI pricing works to dispute what it claims are "incorrect" characterizations by consumer watchdogs, lawmakers, and media outlets. In a letter to lawmakers who accused Delta of using AI to spy on customers' personal data in order to "jack up" prices, Delta insisted that "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." Confusion arose after Delta Air Lines President Glen William Hauenstein discussed the AI pricing on a summer earnings call. Hauenstein hyped the AI pricing as working to propel revenue, confirming that about 3 percent of domestic flights were sold using the AI pricing system over the past six months and that Delta planned to expand that to 20 percent of tickets by the end of the year. Critics demanded transparency, raising concerns that Delta's AI pricing could lead to discriminatory pricing based on a customer's search history or prior purchases. But Delta did not rush to clarify how its AI pricing actually works until lawmakers sent a letter probing Delta's AI practices. Those lawmakers had just announced the Stop AI Price Gouging and Wage Fixing Act, with a press release that called out Delta among companies whose AI pricing models needed to be banned to prevent surveillance pricing that lawmakers fear will disproportionately disrupt fair pricing for the least wealthy. Responding, Delta's chief external affairs officer, Peter Carter, thanked lawmakers for their "thoughtful questions regarding Delta's use of AI," then cautioned them against making assumptions about Delta's AI pricing. "Your letter presupposes that we are using, and intend to use, AI for 'individualized' pricing or 'surveillance' pricing, leveraging consumer-specific personal data, such as sensitive personal circumstances or prior purchasing activity to set individualized prices," Carter said. "To clarify, this is incorrect and this assumption, unfortunately, has created confusion and misinformation in the public discourse." Delta scandal highlights value of transparency According to Delta, the company has "zero tolerance for discriminatory or predatory pricing" and only feeds its AI system aggregated data "to enhance our existing fare pricing processes." Rather than basing fare prices on customers' personal information, Carter clarified that "all customers have access to the same fares and offers based on objective criteria provided by the customer such as origin and destination, advance purchase, length of stay, refundability, and travel experience selected." The AI use can result in higher or lower prices, but not personalized fares for different customers, Carter said. Instead, Delta plans to use AI pricing to "enhance market competitiveness and drive sales, benefiting both our customers and our business." Factors weighed by the AI system, Carter explained, include "customer demand for seats and purchasing data at an aggregated level, competitive offers and schedules, route performance, and cost of providing the service inclusive of jet fuel." That could potentially mean a rival's promotion or schedule change could trigger the AI system to lower prices to stay competitive, or it might increase prices based on rising fuel costs to help increase revenue or meet business goals. "Given the tens of millions of fares and hundreds of thousands of routes for sale at any given time, the use of new technology like AI promises to streamline the process by which we analyze existing data and the speed and scale at which we can respond to changing market dynamics," Carter wrote. He explained the AI system helps Delta aggregate purchasing data for specific routes and flights, adapt to new market conditions, and factor in "thousands of variables simultaneously." AI could also eventually be used to assist with crew scheduling, improve flight availability, or help reservation specialists answer complex questions or resolve disputes. But "to reiterate, prices are not targeted to individual consumers," Carter emphasized. Delta further pointed out that the company does not require customers to log in to search for tickets, which means customers can search for flights without sharing any personal information. For AI companies paying attention to the Delta backlash, there may be a lesson about the value of transparency in Delta's scandal. Critics noted Delta was among the first to admit it was using AI to influence pricing, but the vague explanation on the earnings call stoked confusion over how, as Delta seemed to drag its feet amid calls by groups like Consumer Watchdog for more transparency.

Delta's dynamic AI pricing plan sounds different now

Delta Air Lines is explaining more about its AI-assisted dynamic pricing model after coming under scrutiny for recent comments about the pricing. In November, Delta president Glen Hauenstein said at an investor day that "we will have a price that's available on that flight, on that time, to you, the individual." However, responding to questions sent by lawmakers, EVP and chief external affairs officer Peter Carter says in a letter that "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." He also says that the company has "zero tolerance" for discriminatory or predatory pricing. As part of its latest earnings report, Hauenstein said that the company planned to deploy the technology, developed by a company called Fetcherr, to about 20 percent of its domestic network by the end of the year. "Our AI-powered pricing functionality is designed to enhance our existing fare pricing processes using aggregated data," according to Carter. "This technology is a decision-support tool that simply provides informed insights for our analysts, who oversee and fine-tune the recommendations to ensure they are consistent with our business strategy." In his comments to investors and analysts last year, Hauenstein said the AI was taking on the role of a "super analyst," responding to changes in real time. The company's statement today frames that more explicitly as responding to competitors pricing and overall buying trends, in an attempt to find the highest price for a market as opposed to an individual customer. Carter says that Delta is "evaluating" the "AI pricing recommendation functionality" and that it does not share personal information with Fetcherr. Carter's letter was replying to one from Senators Ruben Gallego (D-AZ), Mark Warner (D-VA), and Richard Blumenthal (D-CT), who wrote to Delta CEO Ed Bastian expressing concerns about the technology in July. Reps. Greg Casar (D-TX) and Rashida Tlaib (D-MI) have also introduced the Stop AI Price Gouging and Wage Fixing Act, which would ban companies from using AI to "set prices or wages based on Americans' personal data."

Congress introduces bill to ban AI surveillance pricing

Two Democratic members of Congress, Greg Casar (D-TX) and Rashida Tlaib (D-MI,) have introduced legislation in the US House of Representatives to ban the use of AI surveillance to set prices and wages. During Delta's Q2 earnings call last week, Delta's president Glen Hauenstein said that the airline has already rolled out AI-controlled dynamic pricing for 3 percent of its customers and is aiming to have 20 percent of fares set using the system by the end of the year. Software biz Fetcherr supplies the pricing code to Delta and others in the industry, including Virgin Atlantic and WestJet. "We're in a heavy testing phase. We like what we see," he told analysts. "We like it a lot, and we're continuing to roll it out, but we're going to take our time and make sure that the rollout is successful as opposed to trying to rush it and risk that there are unwanted answers in there." Delta's move is nothing new. Many companies adjust prices depending on circumstances - the business plan for ride-hailing apps, for instance, is built around the idea that peak demand leads to peak prices. Supply and demand is a fundamental part of current economic thinking. Software that munges massive amounts of data just makes that process more efficient and instantaneous. Nevertheless, the use of AI sparked an outcry, and politicians took interest. The new legislation, the Stop AI Price Gouging and Wage Fixing Act, wants to ban the use of advanced AI systems to analyse personal data in setting prices and wages. "Giant corporations should not be allowed to jack up your prices or lower your wages using data they got spying on you," said Casar. "Whether you know it or not, you may already be getting ripped off by corporations using your personal data to charge you more. This problem is only going to get worse, and Congress should act before this becomes a full blown crisis." The representatives want the FTC, the Equal Employment Opportunity Commission, and individual states to enforce the rules of the bill. The legislation would also allow private citizens to take action against companies using such practices. In January, the FTC issued a staff report indicating that so-called "surveillance pricing" is already occurring across some sectors, and may be expanding. The agency found that companies are adjusting prices based on factors such as browser type, device used, location, shopping history, and inferred personal characteristics, including wealth. "The FTC should continue to investigate surveillance pricing practices because Americans deserve to know how their private data is being used to set the prices they pay and whether firms are charging different people different prices for the same good or service," said the outgoing FTC Chair Lina Khan. The FTC offered a hypothetical example in which a consumer profiled as a new parent could be shown higher-priced baby thermometers, since they were less likely to own one already. The agency found that at least 250 companies were working with pricing intermediaries using such techniques, and that these firms often rely on data from brokers and other third-party sources. "Armed with extraordinary access to personal information, corporations are using opaque algorithms to set prices based on perceived individual need, which often means higher costs for essential goods," said Lee Hepner, senior legal counsel at the American Economic Liberties Project, which supports the legislation. "Grocery prices have risen 26 percent since the pandemic-era explosion of online shopping, dovetailing with new technology designed to squeeze every last penny from consumers. Federal lawmakers should join this effort to restore fair, transparent, and predictable pricing." The FTC voted 3-2 to continue studying the issue, with both Republican commissioners voting against. Commissioner Andrew Ferguson, the newly appointed head of the regulator, was quite firm [PDF] in his rebuttal, saying more study of the issue is needed. Meanwhile, Republicans hold the House and the Senate, suggesting the legislation has little chance of passage. ®

Delta Air assures US lawmakers it will not personalize fares using AI

WASHINGTON, Aug 1 (Reuters) - Delta Air Lines (DAL.N), opens new tab said on Friday it will not use artificial intelligence to set personalized ticket prices for passengers after facing sharp criticism from U.S. lawmakers. Last week, Democratic Senators Ruben Gallego, Mark Warner and Richard Blumenthal said they believed the Atlanta-based airline would use AI to set individual prices, which would "likely mean fare price increases up to each individual consumer's personal 'pain point.'" Delta has said it plans to deploy AI-based revenue management technology across 20% of its domestic network by the end of 2025 in partnership with Fetcherr, an AI pricing company. "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," Delta told the senators in a letter on Friday, seen by Reuters. "Our ticket pricing never takes into account personal data." The senators cited a comment in December by Delta President Glen Hauenstein that the carrier's AI price-setting technology is capable of setting fares based on a prediction of "the amount people are willing to pay for the premium products related to the base fares." Last week, American Airlines (AAL.O), opens new tab CEO Robert Isom said using AI to set ticket prices could hurt consumer trust. "This is not about bait and switch. This is not about tricking," Isom said on an earnings call, adding "talk about using AI in that way, I don't think it's appropriate. And certainly from American, it's not something we will do." Delta said airlines have used dynamic pricing for more than three decades, in which pricing fluctuates based on a variety of factors like overall customer demand, fuel prices and competition but not a specific consumer's personal information. "Given the tens of millions of fares and hundreds of thousands of routes for sale at any given time, the use of new technology like AI promises to streamline the process by which we analyze existing data and the speed and scale at which we can respond to changing market dynamics," Delta's letter said. It added that AI can "assist our analysts with pricing by reducing manual processes, accelerating analysis and improving time to market for pricing adjustments." Reporting by David Shepardson; Editing by Chizu Nomiyama and David Gregorio Our Standards: The Thomson Reuters Trust Principles., opens new tab

Delta will not use AI to set personalized ticket prices

WASHINGTON, Aug 1 (Reuters) - Delta Air Lines (DAL.N), opens new tab said Friday it will not use artificial intelligence to set personalized ticket prices for passengers after facing sharp criticism from U.S. lawmakers. Last week, Democratic Senators Ruben Gallego, Mark Warner and Richard Blumenthal said they believe the Atlanta-based airline would use AI to set individual prices, which would "likely mean fare price increases up to each individual consumer's personal 'pain point.'" Delta has said it plans to deploy AI-based revenue management technology across 20% of its domestic network by the end of 2025 in partnership with Fetcherr, an AI pricing company. "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," Delta told the senators in a letter Friday seen by Reuters. "Our ticket pricing never takes into account personal data." Reporting by David Shepardson; Editing by Chizu Nomiyama Our Standards: The Thomson Reuters Trust Principles., opens new tab

Delta plans to use AI in ticket pricing. Here's how it could impact the cost to fly

Artificial intelligence could set the price of your next flight. One of the nation's biggest airlines, Delta, is making headlines after its president revealed plans to double down on using AI to dynamically set ticket pricing. The airline plans to use AI to set prices for up to 20% of its domestic flights by the end of the year, up from its current 3%. "We like what we see, we like it a lot, and we're continuing to roll it out," Delta's president said during a recent investor call. Clint Henderson with the travel website ThePointsGuy.com says integrating artificial intelligence takes the dynamic pricing model airlines already use and puts it on steroids. "Airlines already have a huge team of revenue managers who are looking to see what demand is like in different markets, what days of the week they should raise, when they should lower prices, how fare buckets are selling or not selling, and adjusting prices accordingly," Henderson said. "So instead of having 10 humans doing pricing, they'll have a machine doing it for them." But Delta's plan is hitting turbulence. Three U.S. senators sent a letter to the airline raising privacy concerns, accusing Delta of using personal data to set individualized prices. We asked Delta for comment, and a spokesperson said the airline isn't using personal data to charge customers different fares. "There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal information or otherwise," a Delta spokesperson said in an emailed statement. "A variety of market forces drive the dynamic pricing model that's been used in the global industry for decades, with new tech simply streamlining this process. Delta always complies with regulations around pricing and disclosures." However, Delta executives previously said to investors that the technology is capable of setting fares based on what it predicts someone would be willing to pay for that ticket. Fetcherr, the company providing the technology to Delta, previously bragged about "hyper-personalization" of prices before scrubbing it from its site, travel site Thrifty Traveler first reported. Frequent flyer Rebecca Perschon says she worries the high-tech approach could make it harder to know whether you're getting a good deal. "I think we'd be at a disadvantage," Perschon said, noting she and her husband are usually limited to traveling at peak times on weekends and during holidays due to their work schedules. "We just kind of have to build that into our travel budget every year, sadly." Henderson said as more airlines use more data to set prices, inevitably, what you pay will become more personal and less predictable. "Machines are better than humans at setting prices, so prices overall could trend higher," he said. "That's why airlines are investing in this."

US Senator Raises Alarm Over Delta Air Lines' Testing of 'Personalized' Pricing | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. "I've recently seen where I think AI can be used handily in a very anti-consumer way. And that's what Delta Air Lines is starting to do," Warner said at a Senate subcommittee hearing on AI held Wednesday (July 30). Delta is testing AI-powered personalized pricing on about 3% of its flights, with plans to expand the program to 20% by year-end. The system leverages customer data -- potentially browsing behavior, income estimates, purchase history and other factors -- to offer customized fares. That contrasts with traditional dynamic pricing, which fluctuates based on market supply and demand but displays the same price to all consumers at a given moment. "We all know there's 'surge' pricing," Warner said. "Tickets for planes cost more around the holidays and cost more to go south in the winter than it does in the summer. That makes sense." But "surveillance" pricing is different since it considers "massive" amounts of data of the individual, Warner said. "Do we really want an airline to know that ... if you've got Taylor Swift concert tickets in city Y, and they know that, they can individually price to collect a few extra dollars?" the senator asked. These little price bumps add up. Warner said the prediction is that the airline industry would increase profits by $4.4 trillion. "That's a lot of money based upon a surveillance pricing scheme," Warner said. "I think we at least ought to have more information before we move forward." Warner, Sen. Richard Blumenthal (D-Conn.), and Sen. Ruben Gallego (D-Ariz.) reportedly wrote a letter to Delta expressing their disapproval of the practice, according to Newsweek. The Chicago Tribune editorial board also has spoken out about "personalized" pricing as well. In a statement last week to PYMNTS, a Delta spokesperson said, "there is no fare product Delta has ever used, is testing, or plans to use that targets customers with individualized offers based on personal information or otherwise." The spokesperson added, "A variety of market forces drive the dynamic pricing model that's been used in the global industry for decades, with new tech simply streamlining this process. Delta always complies with regulations around pricing and disclosures." Read also: American Airlines CEO Slams AI Fare Setting as Trickery During Delta's briefing with analysts last November, President Glen Hauenstein had provided details about the airline's "personalized" pricing experiment. "We will have a price that's available on that flight, on that time, to you, the individual," Hauenstein said. He described the AI tool as a "super analyst," adding that early results have shown "amazingly favorable unit revenues." Delta seeks to gain a "first-mover advantage," Hauenstein had said. "We do believe that we are ahead of our competitors in terms of implementing this and in changing our business processes and rules around it." Ultimately, this is "a full reengineering of how we price -- and how we will be pricing in the future," Hauenstein added. While Delta touts the approach as a competitive advantage, critics argue it raises ethical and regulatory concerns. The Federal Trade Commission (FTC) has labeled such practices as "surveillance pricing," and its January report cited mounting examples of retailers using customer behavior to determine prices, sometimes without clear disclosure. Delta maintains it is not targeting customers with personalized offers based on sensitive data. "There is no fare product Delta has ever used, is testing, or plans to use that targets customers with individualized offers based on personal information," a spokesperson told PYMNTS. Still, industry experts warn that trust could erode if consumers feel manipulated. Philip Carls, a board member at pricing platform Priceagent, told PYMNTS that "passengers won't know if they're getting a fair deal or being targeted." Europe's stricter data rules under GDPR may also limit Delta's ambitions abroad. Airlines must justify personalized pricing under a "legitimate interest" standard and could face lawsuits if consumers feel discriminated against, Carls said. Read more: Delta Air Lines Keeps Capacity Growth Flat Amid 'Broad Economic Uncertainty' United Airlines Raising Fees for Travel Perks

Delta Air Lines Denies Using Personal Data in Ticket Pricing | PYMNTS.com

By completing this form, you agree to receive marketing communications from PYMNTS and to the sharing of your information with our sponsor, if applicable, in accordance with our Privacy Policy and Terms and Conditions. The airline said this in a letter sent in response to the senators' letter, in which they cited an executive's comments about the airline's collaboration with artificial intelligence firm Fetcherr and said they believed Delta would use AI to set individual prices and charge as much as the customer would pay, Reuters reported Friday (Aug. 1). "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 its letter, per the report. "Our ticket pricing never takes into account personal data." Sen. Mark Warner of Virginia, one of the three lawmakers who wrote the letter to Delta, linked to a news article about Delta's response in a Friday post on social platform X and said he is encouraged by the airline's letter but wants more information about its collaboration with Fetcherr. "Many questions remain about Delta's partnership with Fetcherr -- a foreign company that has bragged about 'using all the data we can get our hands on' and being 'very stealth about how we work,'" Warner said in the post. "While I'm encouraged to hear Delta commit to not using surveillance pricing, more transparency is needed around Fetcherr's data collection practices and how those may factor into the AI-powered pricing recommendations that Delta relies on." PYMNTS reported July 22 that Delta President Glen Hauenstein said during the airline's investor day held in November that AI is a "super analyst" and has delivered "amazingly favorable unit revenues." "We will have a price that's available on that flight, on that time, to you, the individual," Hauenstein said. "Not a machine that's doing an accept reject and a static price grid." Sen. Ruben Gallego of Arizona, who also wrote the letter to Delta, said in a July 15 post on X: "This isn't fair pricing or competitive pricing. It's predatory pricing. I won't let them get away with this." Asked about the post by PYMNTS at the time, a Delta spokesperson said: "A variety of market forces drive the dynamic pricing model that's been used in the global industry for decades, with new tech simply streamlining this process. Delta always complies with regulations around pricing and disclosures."

Delta Air Lines tries to calm fury over ticket prices, telling...

Delta Air Lines said Friday it will not use artificial intelligence to set personalized ticket prices for passengers after facing sharp criticism from lawmakers. Last week, Democratic Senators Ruben Gallego, Mark Warner and Richard Blumenthal said they believed the Atlanta-based airline would use AI to set individual prices, which would "likely mean fare price increases up to each individual consumer's personal 'pain point.'" Delta has said it plans to deploy AI-based revenue management technology across 20% of its domestic network by the end of 2025 in partnership with Fetcherr, an AI pricing company. "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," Delta told the senators in a letter on Friday, seen by Reuters. "Our ticket pricing never takes into account personal data." The senators cited a comment in December by Delta President Glen Hauenstein that the carrier's AI price-setting technology is capable of setting fares based on a prediction of "the amount people are willing to pay for the premium products related to the base fares." Last week, American Airlines CEO Robert Isom said using AI to set ticket prices could hurt consumer trust. "This is not about bait and switch. This is not about tricking," Isom said on an earnings call, adding "talk about using AI in that way, I don't think it's appropriate. And certainly from American, it's not something we will do." Delta said airlines have used dynamic pricing for more than three decades, in which pricing fluctuates based on a variety of factors like overall customer demand, fuel prices and competition but not a specific consumer's personal information. "Given the tens of millions of fares and hundreds of thousands of routes for sale at any given time, the use of new technology like AI promises to streamline the process by which we analyze existing data and the speed and scale at which we can respond to changing market dynamics," Delta's letter said. It added that AI can "assist our analysts with pricing by reducing manual processes, accelerating analysis and improving time to market for pricing adjustments."

Delta Air assures US lawmakers it will not personalize fares using AI

WASHINGTON (Reuters) -Delta Air Lines said on Friday it will not use artificial intelligence to set personalized ticket prices for passengers after facing sharp criticism from U.S. lawmakers. Last week, Democratic Senators Ruben Gallego, Mark Warner and Richard Blumenthal said they believed the Atlanta-based airline would use AI to set individual prices, which would "likely mean fare price increases up to each individual consumer's personal 'pain point.'" Delta has said it plans to deploy AI-based revenue management technology across 20% of its domestic network by the end of 2025 in partnership with Fetcherr, an AI pricing company. "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," Delta told the senators in a letter on Friday, seen by Reuters. "Our ticket pricing never takes into account personal data." The senators cited a comment in December by Delta President Glen Hauenstein that the carrier's AI price-setting technology is capable of setting fares based on a prediction of "the amount people are willing to pay for the premium products related to the base fares." Last week, American Airlines CEO Robert Isom said using AI to set ticket prices could hurt consumer trust. "This is not about bait and switch. This is not about tricking," Isom said on an earnings call, adding "talk about using AI in that way, I don't think it's appropriate. And certainly from American, it's not something we will do." Delta said airlines have used dynamic pricing for more than three decades, in which pricing fluctuates based on a variety of factors like overall customer demand, fuel prices and competition but not a specific consumer's personal information. "Given the tens of millions of fares and hundreds of thousands of routes for sale at any given time, the use of new technology like AI promises to streamline the process by which we analyze existing data and the speed and scale at which we can respond to changing market dynamics," Delta's letter said. It added that AI can "assist our analysts with pricing by reducing manual processes, accelerating analysis and improving time to market for pricing adjustments." (Reporting by David Shepardson; Editing by Chizu Nomiyama and David Gregorio)