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Senators Express Concern Over Delta’s Use of AI in Airfare Pricing

Senators Raise Concerns Over Delta’s AI-Driven Airfare Pricing
Delta Air Lines, headquartered in Atlanta, is under increasing scrutiny from U.S. senators regarding its expanding use of artificial intelligence (AI) to determine airfare prices. Lawmakers have expressed apprehension that this technology could enable individualized pricing strategies, potentially resulting in higher fares for certain customers. These concerns have sparked a broader debate about transparency and fairness in airline pricing practices.
Delta has firmly denied that its AI systems target customers based on personal information. A company spokesperson emphasized that “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.” Instead, the airline asserts that its AI algorithms incorporate factors such as route demand, flight timing, customer demand, jet fuel prices, and other operational data to set fares.
Expansion of AI Pricing and Industry Context
Currently, Israeli startup Fetcherr manages pricing for approximately 3% of Delta’s domestic flights, a notable increase from 1% last November. Delta President Glen Hauenstein informed investors that the airline aims to extend AI-driven pricing to cover 20% of its domestic schedule by the end of the year. Hauenstein described the rollout as a “heavy testing phase,” expressing optimism about the technology’s performance while emphasizing a cautious approach to avoid unintended consequences. He also noted that Delta is already observing improved “unit revenues” as a result of the AI implementation.
The airline’s expansion of AI pricing has drawn criticism from lawmakers and consumer advocacy groups concerned about the potential for opaque fare structures and the risk of disadvantaging certain travelers. Despite Delta’s assurances that personal identifiers are not used, the possibility of individualized pricing has intensified calls for greater regulatory oversight and transparency.
Laurie Garrow, director of the Air Transportation Lab at Georgia Tech, highlighted that Delta is not unique in adopting AI for airfare pricing. She pointed out that Fetcherr also provides services to other carriers, including Delta’s partners WestJet and Virgin Atlantic. The Air Transportation Lab, which collaborates with airlines including Delta on revenue management research, is increasingly focusing on AI as it becomes more prevalent across the industry.
AI’s Impact on Pricing Models and Consumer Experience
Garrow explained that traditional airline pricing relies on fare “buckets,” where prices increase incrementally as lower-priced seats sell out. In contrast, AI enables more sophisticated and dynamic pricing decisions. For instance, if a booking appears to be for a leisure trip involving a Saturday night stay, the algorithm may detect greater price sensitivity and offer a discount to secure the sale, rather than immediately raising the fare.
To date, Garrow noted, there is no evidence that AI pricing systems utilize personal data such as gender, age, ZIP code, or IP address. Instead, pricing adjustments are more likely influenced by factors like booking timing and travel patterns. Additionally, international privacy regulations and concerns about public backlash against perceived price gouging serve as constraints on how airlines deploy AI in fare setting.
As Delta and other carriers continue to expand their use of AI in pricing strategies, the ongoing debate over transparency, fairness, and consumer protection is expected to intensify.

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