Delta Air Lines has courted controversy by using AI to price its tickets – 1% of fares back in the fall, 3% of fares at the time of its earnings call last month, and with a plan to hit 20% by year-end. American Airlines CEO Robert Isom blasted them for a “breach of trust” during his airline’s earnings call.
After pitching the role that AI will play in generating incremental revenue for the airline to investors, Delta now says there’s really nothing to see here. Asked by Senators to address their plan to use information about individual customers to figure out how much they’ll pay, Delta says they aren’t doing this at all. They’re really just using computers to help their analysts become more efficient.
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. To clarify, this is incorrect and this assumption, unfortunately, has created confusion and misinformation in public discourse.
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.
New: @Delta responds to Democratic senators on use of AI to set ticket prices https://t.co/ATb0ciWnw4 pic.twitter.com/PhCpnfriTL
— David Shepardson (@davidshepardson) August 1, 2025
Where could we all have gotten the idea that Delta “will have a price that’s available on that flight, on that time to you, the individual”? From Delta’s President. At their Investor Day. Is Delta’s government relations guy lying, or was the airline’s President committing securities fraud?
Delta President Glen Hauenstein shared at their November 2024 Investor Day that they aren’t there yet but what they are working towards is offering specific prices on specific flights to specific customers. This is called “offer management.”
[T]his is again a full reengineering of how we price and how we will be pricing in the future.
And if you think about it today, there are two disciplines. There is pricing, which sets the price points and then there’s revenue management, which controls access into the inventory of those price points.
And over time, we think this is going to get melded together, that it’s going to be really just offer management. That we will have a price that’s available on that flight, on that time to you, the individual. Not a machine that’s doing an accept reject and a static price grid.
Delta is very clear that they see the future as using AI to target individualized prices at specific consumers. But they aren’t there yet.
So when Delta says they are not doing this today, that is true. And I suppose they have no ‘intent’ to use it until the technology is there to do so and proven to work. The very fact that they aren’t there yet means they don’t intend, today, to use it.
Which I guess means both their Executive Vice President and President can both be telling the truth – they do not intend to do this today, but it’s what they are working towards for tomorrow. They’re neither lying to Congress nor committing securities fraud. They’re just carefully parsing words at this point. Maybe a little too carefully.
The crazy thing of course is what’s being misunderstood is that AI is likely to lead to greater confidence offering lower prices to specific customers, rather than raising prices on individuals (who at least currently can – as the letter observes – buy tickets without logging in at Delta.com… or for that matter from Expedia).
Oh course all companies will use whatever technology may exist to maximize profits and target customers. This is what they SHOULD do in a capitalistic society. No one is making anyone buy an airline ticket. If you think it is too much or can’t afford it don’t go (or look at other options). I have ZERO problem with any company taking steps to maximize profits on behalf of their shareholders.
I don’t mind this natural progression. It’s where we are all headed and nobody can stop it.
I’m sitting here at my keyboard typing on a Friday afternoon with no plans for the weekend. I always keep a travel bag packed. If their AI wants to know I have an itch to go somewhere randomly, knows my habits and patters, and even knows what is in my bank account and what I can “afford” — have at it.
Show me a new place for that extra I have left after bills and expenses that I want to see.
Bring it on.
I’m grateful that you’re calling this out. Generally I’m agnostic re Delta: I’ve flown them many times domestically and trans-Atlantic (esp when BNA was my home airport) and have been generally satisfied. But using AI to “read my mind” to discern my pricing tolerance seems pretty creepy
Liars.
Any one who believes them is a fool.
Without some regulatory framework, this is the future.
I would do the same if I were them.
It could never be possible that Gary misinterprets something that somebody says, now put it? The quote you cited doesn’t at all say they will price specific to each individual
It does mean what Mike above says, which is that they can see your propensity to buy and be willing to offer fares and flights that might be attractive to you
Don’t worry, @Tim Dunn, so long as they say nice things about our ‘king,’ everything should be fine. Congress is hardly better than the state duma these days. It’s sad, but it is what it is… for now.
Home insurance already does something similar, and it didn’t take AI. They estimate how likely you’ll renew your policy vs. get quotes elsewhere, and they price accordingly.
It is simply a matter of telling investors the magic word which, at this time, is AI. You have to say you are using it despite not really using it in the least, or you won’t get that bump from the investors and won’t get that bump in your bonus. Just like Marriott using “AI” to give out upgrades. There is no intelligence in that program, just automation. Not the same thing and they know it but you have to use the latest buzzword to get the investors
“Are”, “would” and “will have three different meanings. “We ARE using…” “We WOULD be using…” “We WILL be using…” Much ado about nothing.
What I find fascinating with this is how it reflects a 180 degree flip on the concept of “loyalty”. Fly Delta a lot? Like spending extra for a better seat? Give Delta a lot of your money?
And what is the reward for your loyalty? Delta will charge you ***MORE*** than someone who never flies with them.
Want a better deal with Delta? Stop flying them. Ask American Airlines what happens when you piss on your best, most loyal customers…
@Thing 1 — Good points; unless, of course, you’re ‘into’ that… wait, is there an actual ‘tape’? In addition to the Epstein stuff, they really should release whatever went down at the Ritz-Carlton Moscow. Psh.
Wow, an airline lying … again.
@ Gary — So they are lying. Par for the course.
If I’ve learned anything over the last decade, it’s that anybody who decries “misinformation” is themselves lying and guilty AF. See Obama, Clinton, Brennan, Comey, etc.
@ Tim — C’mon, dude. Hauenstein’s job is screwing customers continuously. Of course he is lying.
@Mantis — Umm, anyone that calls attempts at ‘transparency’ or ‘accountability’ a ‘witch hunt’ is usually guilty, too. And the whole ‘projection’ thing. Wait a minute… didn’t your guy also say anyone who pleads the ‘Fifth’ is also guilty? Huh… anyway, nothing to see here. I know, I know. Cry harder. ‘Woke is dead.’ TDS. I remember…
@ Mantis — I didn’t know “etc.” was now an abbreviation for “all elected Republicans”.
@Tim Dunn – Instead of having a set of prices and inventory at each price point, Hauenstein says they’ll decide which price to make available based on “you, the individual.” If you want to split hairs and say that’s somehow different than a “price specific to each individual” you are making my point exactly.