By David Shepardson
(Reuters) -U.S. Transportation Secretary Sean Duffy said Tuesday the department has concerns about the use of AI to set personalized airline ticket prices and will investigate if anyone does so.
Last week, Delta Air Lines told lawmakers it will not and has not used AI to set prices for individual consumers. “To try to individualize pricing on seats based on how much you make or don’t make or who you are, I can guarantee you that we will investigate if anyone does that,” Duffy said. “We would engage very strongly if any company tries to use AI to individually price their seating.”
Duffy noted Delta clarified that it would not use AI for pricing individual tickets, “and I’ll take them at face value.”
Late last month, Democratic Senators Ruben Gallego, Mark Warner and Richard Blumenthal said they believed the Atlanta-based airline would use AI to set individual prices, which would “likely mean fare price increases up to each individual consumer’s personal ‘pain point.'”
Delta previously said it 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.
Fetcherr on its website says its technology is “trusted by the world’s leading airlines,” and lists Delta, Westjet, Virgin Atlantic, Viva and Azul.
American Airlines CEO Robert Isom said last month using AI to set ticket prices could hurt consumer trust.
Democratic lawmakers Greg Casar and Rashida Tlaib have introduced legislation to bar companies from using AI to set prices or wages based on Americans’ personal data and would specifically ban airlines raising individual prices after seeing a search for a family obituary.
Delta said airlines have used dynamic pricing for more than three decades, in which pricing fluctuates based on a variety of factors like overall customer demand, fuel prices and competition, but not a specific consumer’s personal information.
(Reporting by David Shepardson, Editing by Nick Zieminski)
