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American and Southwest Airlines Will Not Use AI for Pricing

American and Southwest Airlines Reject AI-Based Pricing Amid Industry Debate
Congressman Greg Casar (D-Texas) has introduced the "Stop AI Price Gouging and Wage Fixing Act of 2025," a legislative effort aimed at restricting the use of artificial intelligence in consumer pricing. Casar emphasized the urgency of updating legal frameworks to keep pace with rapid AI advancements, expressing concern over companies leveraging personal data—such as search histories—to adjust prices dynamically. He highlighted the ethical risks, stating, “It should just be banned for an airline to know that you have been googling a family obituary and then they jack up your airline ticket prices because they know you're desperate to get to a funeral.”
This legislative proposal emerges amid growing industry debate, particularly following Delta Air Lines’ announcement to deploy AI-driven revenue management technology across 20% of its domestic network by the end of 2025. Delta’s initiative has intensified discussions about the ethical implications and transparency of AI-powered dynamic pricing models.
Divergent Approaches Among Major Airlines
In contrast to Delta’s approach, American Airlines and Southwest Airlines have publicly committed to refraining from using AI for pricing decisions. During a recent earnings call, American Airlines CEO Robert Isom underscored the importance of consumer trust, stating, “Consumers need to know that they can trust American. This is not about bait and switch. This is not about tricking. Others that 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.” While American Airlines is investing in AI technologies to enhance operational efficiency and customer experience—particularly in managing disruptions—it has drawn a clear line against employing AI to set ticket prices.
Southwest Airlines has similarly affirmed its stance, informing NBC 5 that it does not incorporate AI into its pricing models. Nonetheless, the airline recently altered its longstanding policy of free checked baggage, a strategic shift that may influence its competitive positioning despite maintaining a positive financial outlook.
Industry Implications and Ongoing Debate
Experts caution that American and Southwest’s decision to avoid AI-based pricing could complicate efforts to remain competitive, especially as rivals like Delta adopt sophisticated dynamic pricing tools. Lindsay Owens, Ph.D., Executive Director of the Groundwork Collaborative, noted that some companies already adjust prices based on personal data such as zip codes or device types, raising significant concerns about transparency and fairness in pricing practices.
The broader travel industry continues to wrestle with the consequences of integrating AI into pricing strategies. While some consumers may appreciate the transparency offered by airlines rejecting AI-driven pricing, skepticism persists regarding how personal data is utilized. Congressman Casar anticipates that increased transparency and prohibitions on surveillance-based pricing could garner bipartisan support in Congress.
As airlines and policymakers navigate the evolving intersection of AI technology and consumer data, the debate over trust, fairness, and competitive advantage in airline pricing remains unresolved.

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