Delta Air Lines recently drew criticism for revealing that it uses artificial intelligence (AI) to price some airfares.
During an earnings call in early July, airline president Glen Hauenstein said Delta currently uses generative AI technology to price approximately 3 percent of its domestic flights, with the goal of ramping up to 20 percent by the end of 2025.
“We like what we see,” Hauenstein said of the results from Delta’s large market model (LMM) pricing tool supplied by generative AI pricing and inventory management company Fetcherr. “We’re continuing to roll it out, but we’re going to take our time and make sure that the rollout is successful.”
Airfare pricing has always been dynamic, traditionally established by data analysts based on complex factors like demand, jet fuel rates, and route costs. Using AI to help crunch massive data sets on consumer searches, competitor pricing, and weather patterns can help airlines predict when people most want to travel.
The consumer impact, however, may end up looking like the surge pricing from rideshare services Uber or Lyft. In fact, three senators recently voiced concerns regarding the financial implications for travelers.
“Delta’s . . . pricing practices not only present data privacy concerns, but will also likely mean fare price increases . . . at a time when American families are already struggling with rising costs,” Senators Ruben Gallego, Mark Warner, and Richard Blumenthal said in a public letter.
Indeed, beyond the pricing concerns are the privacy ones. “Surveillance pricing has been shown to utilize extensive personal information obtained through a variety of third party channels, including data about a passenger’s purchase history, web browsing behavior, geolocation, social media activity, biometric data, and financial status,” the letter states.
A Delta spokesperson told Afar that Delta has never set individualized pricing based on personal information or otherwise.
Wyatt Mayham, an AI systems expert and cofounder at Northwest AI Consulting, said that “Delta may not use your name when offering you a ticket price, but [the AI] almost certainly factors in device type, search behavior, location, and past booking patterns to estimate your willingness to pay.”
He added, “The FTC calls this surveillance pricing. It’s not legally personal, but it is deeply personalized.”
Travelers should expect wilder price swings with AI-set airfare, said Tom Randklev, head of product for CellPoint Digital, a payment orchestration company that supports airlines worldwide.
“[AI pricing] may benefit bargain hunters who [have] flex dates, clear cookies, or use meta‑search sites, but will definitely have a negative impact on business travelers with less time flexibility,” Randklev said.
Delta isn’t Fetcherr’s only airline client—the tech company also lists Virgin Atlantic, WestJet, Azul, and Viva Aerobus on its product page, which bears the tagline “trusted by the world’s leading airlines.” So while Delta is currently in the spotlight when it comes to AI-influenced pricing, there’s no guarantee other airlines aren’t already implementing similar measures.
“Unlike [with] traditional pricing, passengers won’t know if they’re getting a fair deal or being targeted,” said Philip Carls, a pricing expert who’s led global teams for Amazon, American Express, and Walmart. “AI doesn’t need to know your race or age to discriminate. It can guess a lot based on your zip code, income level, or browsing history, and proving bias is almost impossible.”
Last‑minute bookers, business travelers, and people with higher incomes—sometimes known in the industry as “willing-to-pay passengers”—may end up bearing the brunt of price hikes, since LMMs help airlines quickly identify people who would rather just pay a higher price than continue to search for a lower one. However, it’s not all doom and gloom for everyone.
“There may be lower prices for some customers,” Carls said. “Budget-conscious travelers who rarely fly might see discounted fares to incentivize bookings. Frequent fliers could get exclusive discounts or upgrades, and some customers could benefit from dynamic deals if Delta uses data to offer last-minute discounts to fill seats.”
American Airlines has come out strongly against Delta’s AI stance, with CEO Robert Isom using American’s Q2 earnings call on July 24 to critique Delta’s move.
“Consumers need to know they can trust American,” Isom said in response to a question about whether American would copy Delta in using AI to price its airfare. “I don’t think it’s appropriate and, certainly, from American, it’s not something we will do.”
Yet American’s stance should be taken with a grain of salt, given that American, United, and Delta all raised eyebrows in June when savvy aviation geeks noted that solo travelers have been quoted higher fares than shoppers purchasing tickets for two or more passengers on the exact same routes and dates. So even though American isn’t using AI to establish passenger pricing, some consumers could be paying more based on data acquired by the airlines.
U.S. and Europe regulations currently allow airlines to use dynamic pricing technology, but Randklev expects lawmakers will take a closer look in the coming years.
“A swift pickup in AI‑driven individual pricing will, in time, draw lawmakers’ attention resulting in transparency mandates and regulatory rulemaking,” Randklev said. Carls also warned that lawsuits are likely if travelers feel unfairly targeted.
To best protect yourself in the meantime, Mayham suggested blurring your digital fingerprint as much as possible to intercept the LMM’s ability to identify your “willingness to pay” with the following strategies:
- Search for flights in incognito mode
- Clear your browser cookies
- Stay logged out of your airline account until you’re ready to book
- Use a VPN to mask your location
- Compare prices across devices
- Try different travel dates and airports
“None of these [methods] are perfect, but they make it harder for AI to tag you as someone willing to pay top dollar,” Mayham said.
