{"id":31041,"date":"2025-07-23T10:58:10","date_gmt":"2025-07-23T10:58:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/us\/31041\/"},"modified":"2025-07-23T10:58:10","modified_gmt":"2025-07-23T10:58:10","slug":"deltas-use-of-ai-to-set-airfares-has-some-senators-worried","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us\/31041\/","title":{"rendered":"Delta’s use of AI to set airfares has some senators worried"},"content":{"rendered":"

But Atlanta-based Delta says that\u2019s not what the technology is doing. <\/p>\n

\u201cThere is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal information or otherwise,\u201d a spokesperson said. <\/p>\n

Instead, the technology is using demand for specific routes and flights, flight time and date, customer demand, the price of jet fuel and other information. <\/p>\n

Israeli startup Fetcherr manages pricing for about 3% of Delta\u2019s domestic schedule, company President Glen Hauenstein told investors last week. That\u2019s up from 1% last November<\/a>, and it hopes to reach 20% by the end of the year. <\/p>\n

\u201cWe\u2019re in heavy testing phase,\u201d he said. \u201cWe like what we see. We like it a lot, and we\u2019re continuing to roll it out.<\/p>\n

\u201cBut we\u2019re going to take our time and make sure that the rollout is successful, as opposed to trying to rush it and risk that there are unwanted answers in there,\u201d he said. <\/p>\n

The company is already seeing improved \u201cunit revenues\u201d from it, Hauenstein noted. <\/p>\n

Fetcherr did not respond to The Atlanta Journal-Constitution\u2019s request for comment by deadline.<\/p>\n

\u2018Everyone is doing it\u2019<\/p>\n

Delta is not alone in its search for ways to revolutionize an airfare pricing model that dates back decades, said Laurie Garrow, director of the Air Transportation Lab at Georgia Tech. <\/p>\n

The lab conducts airline revenue management research with input and funding from corporate airline members \u2014 including Delta \u2014 and will be increasing its focus on AI. <\/p>\n

Fetcherr, for example, is already working with several other airlines, including Delta partners WestJet and Virgin Atlantic. \u201cEveryone is doing it,\u201d Garrow told the AJC. <\/p>\n

And when it comes to an impact on jobs, Fetcherr argues its technology<\/a> \u201cisn\u2019t replacing revenue management professionals \u2014 it\u2019s empowering them.\u201d<\/p>\n

As Delta and other airlines<\/a> continue expanding their range of fares and cabin classes, it\u2019s \u201cvery difficult\u201d to match that with a range of prices, Garrow said. AI is needed to handle that scale, she argued. <\/p>\n

Traditional airline pricing involves buckets, or \u201csteps,\u201d of fares, she explained. <\/p>\n

When one is sold out, the next up is offered. But AI allows for far more variety in the airline\u2019s decision about what the next higher fare might be, she explained. <\/p>\n

The algorithm might recognize that a jump from $100 to $300 is usually too much for someone who appears to be traveling on a vacation \u2014 and instead will offer a discount down from $300, in an effort to close the sale. <\/p>\n

\u201cIf you\u2019re doing a Saturday night stay and you\u2019re going to a leisure destination, we know you\u2019re more price sensitive, so you\u2019re more likely to see a discount,\u201d she said. <\/p>\n

So far, she said, the technology doesn\u2019t seem to be \u201cusing gender, using age, using ZIP code, using IP (address).\u201d It\u2019s more the time of day or how far out one is booking that can determine a customer\u2019s price sensitivity. <\/p>\n

International privacy laws and the threat of public backlash for something like hypothetical price gouging for a funeral attendee, she said, will likely keep it that way. <\/p>\n

At this point, when the technology isn\u2019t implemented across platforms, a traveler might notice it only if they compare prices on a carrier\u2019s website versus a travel agency, she explained. <\/p>\n

\u2018Making more money\u2019<\/p>\n

\u201cPricing based on AI algorithms will no doubt increase revenues for Delta,\u201d the senators wrote. <\/p>\n

\u201cHowever, with respect to the interests of Delta\u2019s passengers, there is a danger that this approach will result in higher fares and diminish incentives to improve service.\u201d<\/p>\n

Arlines are \u201cgoing to be making more money,\u201d Garrow confirmed. <\/p>\n

But that could be because they have gained passengers that might have otherwise looked to a competitor, she argued. Or a price increase might happen for premium travelers who can afford it.<\/p>\n

And \u201cthe more revenue I can get out of the premium class, then the more discount fares I\u2019m able to offer for families or the more price sensitive,\u201d Garrow added.<\/p>\n

DELTA AND AI<\/p>\n

Delta and other airlines are looking to revolutionize how they price airfares, with the use of AI.<\/p>\n

This week a few senators pushed back, warning it might lead to privacy concerns and unfair consumer gouging.Delta\u00a0insists it does not use \u2014 and does not plan on using \u2014 any personal information.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"But Atlanta-based Delta says that\u2019s not what the technology is doing. \u201cThere is no fare product Delta has…\n","protected":false},"author":2,"featured_media":31042,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[45],"tags":[182,181,507,74],"class_list":["post-31041","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/31041","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=31041"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/31041\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/31042"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=31041"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=31041"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=31041"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}