AI Airline Ticket Pricing Looms

Excerpt from Quartz

On its recent investor day, Delta Air Lines CEO Ed Bastian bragged that his company had been working with the Israeli artificial intelligence firm Fetcherr to design AI-powered pricing algorithms.

“We’ve now been working with them for, I’d say, the better part of a year,” he said at the time. “And we’ve got about 1% of our network currently being priced by the Fetcherr team. This is again a full reengineering of how we price and how we will be pricing in the future.”

To that point, Sen. Josh Hawley, R-Ark., had a question about how airlines use customer information to determine how much a ticket costs.

“Why do you make people enter in their age and their geographic location and their gender before they can even see the cost of a seat?” he asked.

Klein denied that his airline uses the information to calculate fares but not that his airline uses algorithms to do so.

“That’s a different question,” he said.

Toward the end of the hearing, Democratic Sen. Richard Blumenthal of Connecticut, the committee chair, returned to the question of algorithms and the potential use of AI to drive so-called “dynamic” pricing. He pressed Carter to explain why Delta felt the need to develop its pricing that way.

“It’s more about the right offer at the right time,” Carter said.

Blumenthal, frustrated, put the question over AI price manipulation to the rest of the group.

“I’m assuming none of you can answer this question; I invite others to say that your airlines will never use AI to charge different fees or fares to people at the same time for the same flight,” he said. “Any of you want to commit?”

The executives sat in silence.

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