Senators confront Delta over controversial AI pricing strategy

In the United States, a group of Democratic senators expressed significant concerns regarding Delta Air Lines' planned use of artificial intelligence to set ticket prices. In a letter dated Monday, Senators Ruben Gallego, Mark Warner, and Richard Blumenthal addressed their worries to Delta's CEO, Ed Bastian. They highlighted the potential negative implications of Delta's individualized pricing practices on consumer privacy and the financial burdens faced by American families. The senators noted that Delta has indicated it will implement AI technology across 20% of its network by the end of the year, which has raised concerns about fare increases based on personal data. The lawmakers specifically raised issues surrounding Delta's use of data privacy, pointing out that the airline's AI initiatives could result in fare increases tailored to individual consumers' financial 'pain points.' They cited comments made by Delta President Glen Hauenstein, who mentioned the AI's ability to predict how much people might be willing to pay for premium ticket offerings related to base fares. Their letter emphasized how such practices could exploit extensive personal information from various sources to determine pricing. Delta Air Lines, in response, defended its pricing strategy, asserting that all customers would continue to see identical fares and offers. The airline stated that its dynamic pricing model, a method already utilized in the airline industry for over three decades, is simply being streamlined through AI technology. Delta clarified that there are no fares or pricing plans in place that target individual customers based on personal data, emphasizing compliance with existing pricing regulations. Furthermore, Delta announced its collaboration with Fetcherr, an AI pricing company, to enhance its ticket pricing strategy by adapting to market conditions and forecasting demand. Delta explained that the AI technology would also help learn from past pricing decisions to improve future strategies. The senators' concerns echo similar queries raised earlier this year by Congress, when other airlines were also questioned about their use of customer data for pricing strategies. In this climate of increased scrutiny, Delta's forthcoming implementation of AI-driven pricing highlights both the challenges and opportunities for airlines in navigating customer relations and technological advancements.