Delta denies using AI to come up with inflated, personalized prices

Delta Airlines has recently faced significant backlash regarding its AI-driven pricing strategies, which the company attributes to widespread misunderstanding among the public. In response to allegations from consumer advocates and lawmakers, Delta has stepped forward to clarify the workings of its AI pricing system. In a letter addressed to concerned lawmakers, Delta strongly refuted claims that it uses artificial intelligence to monitor personal customer data for the purpose of inflating prices. The airline stated, "There is no fare product Delta has ever used, is testing, or plans to use that targets customers with individualized prices based on personal data." The confusion was exacerbated when Delta Air Lines President Glen William Hauenstein discussed the AI pricing model during a summer earnings call, highlighting its contribution to revenue growth. He noted that approximately 3% of domestic flights had employed the AI pricing system over the last six months, with plans to increase this to 20% by year-end. Critics have raised alarms about the potential for discriminatory pricing practices that could arise from the AI system, expressing fears that it might take into account a customer's search history or previous purchases. However, Delta delayed providing clarification until the lawmakers sent their inquiry, which coincided with the introduction of the Stop AI Price Gouging and Wage Fixing Act. This legislation aims to prevent companies from using AI in ways that could harm economically vulnerable consumers. Peter Carter, Delta's chief external affairs officer, expressed appreciation for the lawmakers' questions but urged them to reconsider their assumptions. He emphasized that any notion of Delta employing AI for personalized or surveillance pricing based on sensitive customer data is fundamentally inaccurate. Carter stated, "To clarify, this is incorrect, and this assumption has unfortunately led to confusion and misinformation in public discourse."