Current Events > Delta has found a use for AI

(+) Yeah! (+)

https://fortune.com/2025/07/16/delta-moves-toward-eliminating-set-prices-in-favor-of-ai-that-determines-how-much-you-personally-will-pay-for-a-ticket/

Delta has a long-term strategy to boost its profitability by moving away from set fares and toward individualized pricing using AI. The pilot program, which uses AI for 3% of fares, has so far been amazingly favorable, the airline said. Privacy advocates fear this will lead to price-gouging, with one consumer advocate comparing the tactic to hacking our brains.

Fresh off a victory lap after a better-than-expected earnings report, Delta Air Lines is leaning into AI as a way to boost its profit margins further by maximizing what individual passengers pay for fares.

By the end of the year, Delta plans for 20% of its ticket prices to be individually determined using AI, president Glen Hauenstein told investors last week. Currently, about 3% of the airlines flight prices are AI-determined, triple the portion from nine months ago.

Over time, the goal is to do away with static pricing altogether, Hauenstein explained during the companys Investor Day in November.

This is a full reengineering of how we price and how we will be pricing in the future, he said. Eventually, we will have a price thats available on that flight, on that time, to you, the individual.

He compared AI to a super analyst who is working 24 hours a day, seven days a week and trying to simulate real time, what should the price points be?
While the rollout would be a multiyear process, he said, initial results show amazingly favorable unit revenues.
Delta accomplishes this pricing through a partnership with Fetcherr, a six-year-old Israeli company that also counts Azul, WestJet, Virgin Atlantic, and VivaAerobus as clients. And it has its sights set beyond flying. Once we will be established in the airline industry, we will move to hospitality, car rentals, cruises, whatever, cofounder Robby Nissan said at a travel conference.

While Delta is unusually open about its use of AI, other carriers are likely to follow. Already, United Airlines uses generative AI to contact passengers about cancellations, while American Airlines uses it to predict who will miss their flight.

Personalized pricing has been an airline goal for the past decade and a half, Gary Leff, a travel industry authority who first noted Deltas AI strategy, told Fortune. Delta is the first major airline to speak so publicly about its use of AI pricing, to tout it for its potential upside at its investor day in the fall and to offer concrete metrics around its use in its recent earnings call.

Privacy advocates noted Deltas development with concern.They are trying to see into peoples heads to see how much theyre willing to pay, said Justin Kloczko, who analyzes so-called surveillance pricing for Consumer Watchdog, a California nonprofit. They are basically hacking our brains.

Sen. Ruben Gallego (D-Ariz.) called Deltas practice predatory pricing, saying, I wont let them get away with this.
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To be sure, airlines have long offered different prices to different people, even for the same route, based on factors like how travelers bookdirectly, via a comparison-shopping site or a travel agentor how far in advance they shop. As far back as a decade ago, travel websites showed different prices for precisely the same itinerary based on details like which browser a purchaser was using to search for fares. But the use of AI supercharges this type of price discrimination and puts airlines into a legal gray area.

AI isnt just optimizing business operations, but fundamentally rewriting the rules of commerce and consumer experience, Matt Britton, author of Generation AI, told Fortune. For consumers, this means the era of fair pricing is over. The price you see is the price the algorithm thinks youll accept, not a universal rate.

While differential pricing is not illegal per se, federal laws prohibit charging different rates to people based on their sex or ethnicity, and the use of some identifiers like ZIP codes have been shown to have a disparate impact on protected classes. Without a public record of all fares, it would be difficult, if not impossible, to determine if Delta is charging vastly different fares to people based on their membership in a protected class.

Antifar posted...

Privacy advocates fear this will lead to price-gouging,

Antifar posted...

Fresh off a victory lap after a better-than-expected earnings report, Delta Air Lines is leaning into AI as a way to boost its profit margins further by maximizing what individual passengers pay for fares.

Probably because it will and they're admitting it openly?

That shit def looks at your address.

That price wont ever be moving down though. I already tried an AI chatbot on some random site which can give discounts, it would never ever go below a specific minimum and would just abort if you tried to jailbreak it

Well, that will be the last time I fly delta.

Rika_Furude posted...

That price wont ever be moving down though. I already tried an AI chatbot on some random site which can give discounts, it would never ever go below a specific minimum and would just abort if you tried to jailbreak it

Ever you say

Fresh off a victory lap after a better-than-expected earnings report, Delta Air Lines is leaning into AI as a way to boost its profit margins further by maximizing what individual passengers pay for fares.

I hate capitalism

A.I.: all tickets now $100,000

All that PR speak and they dont even say how it works?

Let me guess, it doesnt, but it replaces humans that need pay to live.

_____Cait posted...

All that PR speak and they dont even say how it works?

Let me guess, it doesnt, but it replaces humans that need pay to live.

I mean it's right there in the article. It's how most marketing has been for a long time (not the modern LLM AI, but using AI for personalized marketing has been around for years). They just analyze your spending behavior and determine the maximum amount they can get you to pay for a ticket. It's just getting better at it because the data can be analyzed more cheaply and efficiently now, but they haven't been paying people to do individualized pricing or marketing because it would defeat the purpose (you would definitely pay that person more than you would profit). The individualized pricing stuff done by humans is more like classic sales (cars and other big purchases). All the shit you see on Amazon recommended to you is already an algorithm and has been for a long time and it even does special prices for you to a degree now. This next step is just to really extract the most profit possible out of every individual as cheaply as possible.

https://viewfromthewing.com/several-airlines-now-quietly-let-ai-set-ticket-prices-surprisingly-thats-great-news-for-your-wallet/

_____Cait posted...

All that PR speak and they dont even say how it works?

Let me guess, it doesnt, but it replaces humans that need pay to live.

It makes number go up(in a way that will totally not discriminate against certain groups of people I'm sure).

Then when people stop buying tickets because number too much up, they blame AI.

ssjevot posted...

I mean it's right there in the article. It's how most marketing has been for a long time (not the modern LLM AI, but using AI for personalized marketing has been around for years). They just analyze your spending behavior and determine the maximum amount they can get you to pay for a ticket. It's just getting better at it because the data can be analyzed more cheaply and efficiently now, but they haven't been paying people to do individualized pricing or marketing because it would defeat the purpose (you would definitely pay that person more than you would profit). The individualized pricing stuff done by humans is more like classic sales (cars and other big purchases). All the shit you see on Amazon recommended to you is already an algorithm and has been for a long time and it even does special prices for you to a degree now. This next step is just to really extract the most profit possible out of every individual as cheaply as possible.

I don't get why you'd need an LLM for that when something closer to "traditional" ML would also work

we absolutely have to pass laws, among other things, that says you have to sell to everyone at the same price.

they can fuck off with this. i liked Delta, but I guess ill fly literally any airline besides them for the rest of my life.

I wonder if this might signal the return of travel agencies. Presumably if they were booking the flights it would stymie the AI's attempt to use your data, since they wouldn't know who the customer is until the price is quoted.

Squall28 posted...

That shit def looks at your address.

Cross-checks zillow?

Wouldn't be surprised.

this should just be illegal.

fuck travel agencies!