Delta’s dynamic AI pricing plan sounds different now

• Delta Air Lines has clarified its AI-assisted dynamic pricing model after facing scrutiny for recent comments.
• The company’s president, Glen Hauenstein, previously stated that Delta would use AI to offer individualized prices based on personal data, but EVP Peter Carter says this is not the case.
• Carter states that Delta’s AI-powered pricing functionality is a decision-support tool that provides insights for analysts, and does not target customers with individualized prices based on personal data.
• The company plans to deploy the technology to about 20% of its domestic network by the end of the year, but emphasizes that it will not use personal information to set prices.
• Delta has “zero tolerance” for discriminatory or predatory pricing, and is evaluating the AI pricing recommendation functionality in response to competitors’ pricing and overall buying trends.

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.”

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