Delta Quizzed on Plan To Use AI in Ticket Pricing

A group of Democratic senators is accusing Delta Air Lines of using artificial intelligence to find the “pain point” for individualized customers buying airline tickets in an effort to make as much money as they can off of them.Senators Gallego, Warner, and Blumenthal are concerned the technology could lead to discriminatory pricing. In a letter to Delta’s chief executive, Ed Bastian, the senators asked him to explain the airline’s use of “surveillance-based” fares.“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,’” the letter states.The senators cite recent reports that Delta plans to deploy AI-based revenue management technology across 20 percent of its domestic network by the end of the year in partnership with a company that specializes in using artificial intelligence to set prices to maximize company profit for large airlines, Fetcherr.The letter cites a testimonial by the president of the airline, Glen Hauenstein, on Fetcherr’s website that “the initial results show amazingly favorable units revenue versus the beta, so we are all in on this.”Mr. Hauenstein touted the airline’s move into using artificial intelligence at last year’s Delta investor’s day. He cited the ability for “granular pricing and responsiveness to customer signals.”The chairwoman of the Federal Trade Commission under President Biden, Lina Khan, previously warned that dynamic pricing using AI could discriminate against some consumers.At a tech conference last year, Ms. Khan saw a future in which customers could be “charged more for an airplane ticket because the company knows that they just had a death in the family and need to fly across the country.”Delta says there is nothing nefarious with its use of artificial intelligence and it is not creating unique prices for specific individuals.“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,” the company says in a statement to The New York Sun. “A variety of market forces drive the dynamic pricing model that’s been used in the global industry for decades, with new tech simply streamlining this process. Delta always complies with regulations around pricing and disclosures.”A spokeswoman says the AI technology for dynamic pricing is being tested to eliminate manual processes while accelerating analysis and adjustments, and not to target customers by using their personal data.The airline claims all customers see the exact same fares and offers at the same time. It adds that the technology is being used to forecast demand for specific routes, learn from pricing decisions to improve future outcomes, and adapt to new market conditions in real-time.Delta says a number of factors influence prices, including the time and date of flights, the routes, customer demand, and the price of jet fuel.But the senators say Delta has not shared what safeguards it is using to protect customers from pricing discrimination. They want answers by August 4 on the data inputs Delta uses to train its revenue management system algorithm, what sources it uses to obtain data for setting customized prices for fares or other products, and how many passengers per day are currently purchasing tickets or other services using the customized pricing model.

Delta Quizzed on Plan To Use AI in Ticket Pricing

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