WASHINGTON, July 22 (Reuters) - Three Democratic
senators have pressed Delta Air Lines ( DAL ) CEO Ed Bastian to
answer questions about the airline's planned use of artificial
intelligence to set ticket prices, raising concerns about the
impact on travelers.
"Delta's current and planned individualized pricing
practices not only present data privacy concerns, but will also
likely mean fare price increases up to each individual
consumer's personal 'pain point' at a time when American
families are already struggling with rising costs," Senators
Ruben Gallego, Mark Warner and Richard Blumenthal wrote in a
letter dated Monday and made public on Tuesday.
The senators cited recent comments from Delta that the
airline plans to deploy AI-based revenue management technology
across 20% of its domestic network by the end of 2025 in
partnership with Fetcherr, an AI pricing company.
They said a Delta executive had earlier told investors the
technology is capable of setting fares based on a prediction of
"the amount people are willing to pay for the premium products
related to the base fares."
The airline said in a statement: "There 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."
Delta added that dynamic pricing has been used for more than
three decades, in which pricing fluctuates based on a variety of
factors like overall customer demand but not a specific
consumer's personal information.
Delta said AI technology for dynamic pricing is being tested
to eliminate manual processes while accelerating analysis and
adjustments and it emphasized all customers see the same exact
fares and offers in all retail channels.
Delta said it was testing AI for use in forecasting
demand for specific routes and flights, adapting to market
conditions in real-time, factoring thousands of variables
simultaneously and learning from each pricing decision to
improve future outcomes.
In January, Blumenthal along with Senators Maggie Hassan and
Josh Hawley asked Frontier Airlines and Spirit Airlines
to disclose whether they were manipulating seat fees by using
customers' personal information to charge different fees to
passengers on the same flight.
The senators said the airlines were apparently "using
customers' personal information to charge different seat fees to
passengers on the same flight" despite having the same fare.
Frontier and Spirit did not immediately respond to requests
for comment on their current practices on Tuesday.