Delta Airlines is increasingly incorporating AI into its fare-setting practices, aiming to refine pricing based on trip-related factors, sparking a debate, with critics warning that such personalised pricing, if it incorporates extensive consumer data, could evolve beyond traditional dynamic pricing into ‘surveillance pricing’.
This follows Delta President Glen Hauenstein’s promise last year to ‘fully reengineer’ fare-setting practices, ensuring that airfares are determined, ‘based on that flight, at that time, for you, the individual’. He also claimed that the system could predict what customers are willing to pay for premium services tied to base fares.
Currently, only 3% of Delta’s fares are set using AI, but this figure is expected to rise to 20% by the end of 2025.
What will this mean for passengers?
Sounds like an episode of Black Box? Could well be.
In essence, AI could assess your digital footprint, from where you live, how you book, to even your perceived social status, and offer a different price than it would someone else. Two people shopping for the same flight at the same time could see drastically different fares.
Some refer to this as a new form of dynamic pricing. Others call it what it is: surveillance pricing. While classic yield management adjusts fares based on demand, surveillance pricing goes further by using personal data to test your limits. Unlike dynamic pricing, surveillance pricing operates in a largely unregulated space.
Delta Airlines just announced on their Earnings Call they will be using AI Algorithms to comb through your Personal Data to determine How Much You’d be willing to pay
— MJTruthUltra (@MJTruthUltra) July 25, 2025
So if you’re going to a funeral, they know you’re in a tight spot, exactly when the service will be via your… pic.twitter.com/LsSkQsFnnJ
Lawmakers are raising the alarm
US lawmakers from both parties have expressed concern. Democratic senators Mark Warner, Richard Blumenthal, and Ruben Gallego sent a letter to Delta CEO Ed Bastian warning that personalised pricing could result in fares being increased for each consumer based on their ‘pain point’. They also highlighted significant data privacy concerns, noting that such pricing might rely on data obtained via third-party channels, including browsing history, purchase records, geolocation, social media behaviour, financial status and biometric details.
Republican Senator Josh Hawley echoed these concerns, describing it as ‘the worst thing I have heard from the already awful airline industry’.
In response to growing concerns, New York passed a law this month requiring any seller using personalised pricing algorithms to disclose this to customers. Other states may follow suit.
American Airlines has also voiced criticism, with its CEO, Robert Isom, accusing Delta of deception. ‘This is not about bait and switch. This is about tricking people’, he stated, insisting that American uses AI to improve operations and customer service rather than to set ticket prices.
Delta’s AI pricing is threatening personal privacy & consumers. Putting profits over people, Delta’s AI algorithm uses personal information to tailor pricing up to an individual’s specific pain point—lining the airline’s pockets at the consumer’s expense. pic.twitter.com/FwLv0tNAp8
— Richard Blumenthal (@SenBlumenthal) July 29, 2025
Delta denies any wrongdoing
In an email sent to Fox Business in April, Delta stated that it has never used, tested or planned to use AI-based pricing products that target individuals. The company insisted that its AI tools rely solely on trip-related factors such as booking time and cabin class, rather than personal attributes.
Delta claims that AI simply eliminates manual processes and speeds up existing fare adjustments – a system that airlines have been using for decades.
Delta’s CEO just got caught bragging about using AI to find your pain point — meaning they’ll squeeze you for every penny.
— Ruben Gallego (@RubenGallego) July 15, 2025
This isn’t fair pricing or competitive pricing. It’s predatory pricing.
I won’t let them get away with this.
A longer history
While this may sound like a dystopian tech age, the roots of price manipulation stretch back to President Carter’s Airline Deregulation Act of 1978, which allowed carriers to set their own fares. Using systems like SABRE – operational since the 1960s – to track every booking, the industry centralised its data and later developed DINAMO: a tool designed to maximise profits through dynamic pricing.
Can passengers protect themselves?
Experts suggest that most AI pricing still relies on flight-related information such as when you book, how many travellers are in your party, and your purchase history. To reduce the impact of profiling, they recommend browsing in incognito mode or using privacy-focused browsers such as DuckDuckGo, or a VPN.
In the age of AI, every click can end up costing you.
