Delta Air Lines has clarified its AI-driven dynamic pricing strategy following scrutiny over its recent statements regarding pricing mechanisms.
During an investor event in November, the airline’s president, Glen Hauenstein, remarked that “we will have a price that’s available on that flight, on that time, to you, the individual.” In a subsequent letter to lawmakers, however, Delta’s Executive Vice President and Chief External Affairs Officer Peter Carter asserted 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 emphasized the company’s commitment to a policy of “zero tolerance” for discriminatory or exploitative pricing practices.
In its recent earnings announcement, Hauenstein indicated plans to implement the technology, crafted by Fetcherr, across approximately 20 percent of its domestic service by the year’s end.
Carter described the AI pricing capability as a means to enhance existing fare-setting processes, utilizing aggregated market data. He clarified that this technology serves as a decision-support tool, providing insights for analysts to refine recommendations in line with Delta’s strategic objectives.
Previously, Hauenstein characterized the AI system as functioning like a “super analyst,” adept at responding to market shifts in real time. Delta’s latest communication underlines that the AI focuses on adapting to competitor pricing and broader purchasing behaviors to determine optimal pricing for markets, rather than targeting individual consumers.
Carter also mentioned that Delta is currently “evaluating” the functionalities offered by the AI pricing recommendation system, which does not involve sharing personal data with Fetcherr.
Carter’s response followed inquiries from Senators Ruben Gallego (D-AZ), Mark Warner (D-VA), and Richard Blumenthal (D-CT), who expressed their concerns about the implications of such technology in a July letter to Delta CEO Ed Bastian. Additionally, Representatives Greg Casar (D-TX) and Rashida Tlaib (D-MI) introduced the Stop AI Price Gouging and Wage Fixing Act, targeting the use of AI to set pricing or wages based on individuals’ personal information.
