Delta denies using AI to personalise ticket prices after political backlash

The American airline has assured U.S. lawmakers that it will not use artificial intelligence to personalise airfares based on passengers’ personal data, following public backlash and criticism from both sides of the political spectrum in Congress.

The controversy was reignited last month when Delta President Glen Hauenstein informed investors that around 3% of the airline’s ticket prices are currently determined by AI – triple the proportion from nine months ago – and that the company intends for 20% of its fares to be AI-driven by the end of 2025. Hauenstein had previously spoken of plans to ‘fully reengineer’ fare-setting practices, with the long-term goal of eliminating static pricing altogether. Hauenstein suggested that this AI-based system could predict how much customers would be willing to pay for premium services. This has raised concerns that personalised pricing could replace the traditional dynamic pricing model.

This statement was condemned across the political spectrum, as well as by the public and other figures in the aviation industry. American Airlines CEO Robert Isom warned that such practices were ‘un-American’ and would damage consumer trust. He stated: “This is not about bait and switch. This is not about tricking”.

In response to these concerns, Delta’s EVP and Chief External Affairs Officer, Peter Carter, wrote to senators on Friday. He clarified that the company’s ticket pricing “never takes into account personal data” and that the letter presupposes that “we are using, and intend to use, AI for ‘individualised’ pricing… That is incorrect.” He stated that there is “no fare product that Delta has ever used, is testing, or plans to use that targets customers with individualised prices based on personal data”.

How Delta is using AI

Delta explained that it is evaluating an AI-based revenue management technology developed by Fetcherr, an AI pricing company. This tool is intended to be a decision-support tool for analysts, not an automated pricing system to “oversee and fine-tune the recommendations to ensure they are consistent with [the airline’s] business strategy”. According to the company, the technology will support analysts in their pricing tasks by reducing manual processes, forecasting demand and aggregating purchasing data, adapting it to market conditions as necessary. Delta also assured lawmakers that no personal information is shared with Fetcherr.

Despite these reassurances, some lawmakers remained unconvinced and requested more information on Delta’s AI usage.

Senator Ruben Gallego accused Delta of being two-faced and of sending mixed messages to investors and the public. Yet, he conceded that “if Delta is in fact using aggregated instead of individualised data, that is welcome news”.

Dynamic pricing and new legislation

The airline emphasised its prices are determined by “dynamics and vigorous competition”, a reference to the practice of dynamic pricing used for decades by the industry.

Under this model, fares fluctuate based on factors such as availability, customer demand, fuel prices, and market competition, not consumers’ personal information. The airline underlined that this is a key distinction from individualised pricing.

Last week, Democratic representatives Greg Casar and Rashida Tlaib introduced a new legislative proposal, the Stop Price Gouging the Poor Act, which aims to ban all companies from using AI to set prices based on a buyer’s wages and personal data. The representatives described such practices as economic discrimination and said they were likely to deepen inequalities.