Delta Air Lines Embraces AI for Personalized Ticket Pricing, Aiming to Roll Out Technology to 20% of Flights by Year-End

Delta Air Lines is implementing an advanced dynamic ticket pricing system that leverages artificial intelligence to individually determine the maximum price each customer is willing to pay for flights. This initiative was revealed during the company's latest earnings call, where President Glen Hauenstein discussed the details and implications of the new technology. Delta began testing this AI-driven pricing system last year, initially applying it to just 1% of its ticket prices. The results were overwhelmingly positive, leading the company to expand the technology's influence to 3% of its ticket prices as of the most recent earnings call. Delta aims to escalate this to 20% by the end of the year. “We will have a price that’s available on that flight, at that time, tailored specifically to you, the individual,” Hauenstein explained during a November investor call. The shift to AI-determined pricing is a complete overhaul of Delta’s traditional pricing strategies. Hauenstein described the rollout as “a multiyear, multi-step process,” highlighting the company's commitment to continuous improvement and cautious deployment. While Delta has been transparent about its plans, it acknowledges the potential risks. “It can be very dangerous if it’s not controlled and done correctly,” Hauenstein cautioned. Fetcherr, a travel technology firm, is supplying Delta with the AI pricing technology. Fetcherr also partners with other airlines like Virgin Atlantic, Azul, WestJet, and VivaAerobus. For Delta, the AI will function as a "super analyst," operating around the clock to set custom ticket prices in real-time based on specific flights and times. Airlines have long tailored their ticket prices based on various factors, such as booking lead times, channels used for reservations, and even the type of web browser. However, AI pricing promises to enhance this approach significantly. Delta's AI system will analyze individual customer data to offer personalized prices, potentially optimizing revenue and filling more seats. Despite the favorable outcomes from the initial tests, Delta's personalized pricing strategy has faced criticism. The company previously encountered backlash for charging更高的价格给独自旅行的乘客 compared to groups, a decision it reversed in May. The extent to which Delta's AI system will delve into customer data remains unclear, but it has already raised privacy concerns. Justin Kloczko of Consumer Watchdog told Fortune, "They are trying to see into people’s heads to see how much they’re willing to pay. They are basically hacking our brains." Senator Ruben Gallego of Arizona described it as “predatory pricing,” aimed at maximizing profit by charging each customer the highest possible amount. As Delta continues to roll out this technology, it must balance innovation with ethical considerations and customer trust. The success of AI-driven dynamic pricing will likely depend on transparency and clear communication about how these prices are determined.