Delta is using AI to make ticket prices more relevant to each customer, which could change the way you fly
The airline is using predictive pricing technologies more frequently in an effort to switch from flat fares to demand-based algorithms.
With artificial intelligence, Delta Airlines is ratcheting up its efforts to alter how passengers perceive ticket costs. During its second-quarter results call, the airline announced that it is increasing the usage of AI-powered pricing tools created by the Israeli software company Fetcherr.
Glen Hauenstein, president of Delta, disclosed that roughly 3% of domestic tickets have already been priced as part of the Fetcherr test program. “We’re about 3% domestic today,” Hauenstein stated. “We want to have around 20% by the year’s end.” “You have to train these models as you might expect, and you have to give it multiple opportunities to provide different results,” he continued. “We can report back on what the actual numbers are.”
Instead of using static rates, Delta thinks AI will enable more precise demand-based pricing. “Instead of trying to rush the rollout and run the risk of having unwanted answers in there, we’re going to take our time and make sure that the rollout is successful,” Hauenstein said.
Customers may not see the same ticket price everywhere as a result of this change. Predictive demand models would be used to determine pricing fluctuations instead.
Critics are raising concerns despite the fact that dynamic pricing is legal and becoming more and more common across businesses. “Delta’s CEO was caught boasting about using AI to find your pain point—meaning they’ll squeeze you for every penny,” wrote Senator Ruben Gallego of Arizona. This pricing is neither competitive nor fair. The pricing is exploitative. They cannot get away with this, in my opinion.
