ATLANTA, GA — Delta Air Lines is facing mounting scrutiny over its adoption of artificial intelligence in airfare pricing, following sharp criticism from U.S. lawmakers who raised concerns about potential “personalized pricing” — a practice where AI could tailor fares based on a customer’s individual data or perceived willingness to pay.
In a letter sent Friday to three Democratic senators — Ruben Gallego (AZ), Mark Warner (VA), and Richard Blumenthal (CT) — Delta firmly denied any intent to use AI in that manner, stating:
“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. Our ticket pricing never takes into account personal data.”
The issue surfaced after the senators expressed alarm at comments made by Delta President Glen Hauenstein in December, when he said that Delta’s AI pricing system can predict “the amount people are willing to pay for the premium products related to the base fares.” The lawmakers interpreted this to mean Delta could eventually implement AI tools that price tickets based on individual “pain points” — essentially, the maximum price a specific person might accept.
In a joint statement last week, the senators warned that such a practice would “likely mean fare price increases up to each individual consumer’s personal ‘pain point.’” The phrase sparked public backlash, fueling concerns over digital price discrimination in a sector where pricing transparency is already murky.
While Delta clarified that it is not using AI to set fares on a per-person basis, it acknowledged that it will expand AI-powered dynamic pricing systems to cover 20% of its domestic network by the end of 2025, in collaboration with Israeli startup Fetcherr, which specializes in AI-driven pricing models.
Delta reiterated that this technology is intended to streamline conventional pricing systems based on aggregate market factors — such as demand, fuel prices, and competition — not consumer behavior or identity.
Delta emphasized that dynamic pricing has been used across the airline industry for over 30 years, long before the arrival of advanced machine learning tools. Historically, ticket prices have fluctuated based on broad variables like demand spikes during holidays, competitor pricing, or regional economic trends.
In the letter to lawmakers, Delta wrote:
“Given the tens of millions of fares and hundreds of thousands of routes for sale at any given time, the use of new technology like AI promises to streamline the process by which we analyze existing data and the speed and scale at which we can respond to changing market dynamics.”
In other words, AI would merely optimize what was already a complex pricing algorithm — not personalize it.
Still, lawmakers remain unconvinced. Senator Gallego responded to Delta’s letter, stating:
“Delta is telling their investors one thing, and then turning around and telling the public another. If Delta is in fact using aggregated instead of individualized data, that is welcome news — but we need clarity.”
Delta’s assurances came amid broader industry and regulatory unease. American Airlines CEO Robert Isom voiced his own concerns during an earnings call last week:
“This is not about bait and switch. This is not about tricking. Talk about using AI in that way — I don’t think it’s appropriate. And certainly from American, it’s not something we will do.”
At the legislative level, Representatives Greg Casar (TX) and Rashida Tlaib (MI) introduced a bill last week that would ban the use of AI for pricing or wage decisions based on personal data. The bill directly references potential scenarios such as airlines raising ticket prices after detecting a consumer searching for a family obituary — a hypothetical scenario designed to illustrate emotional exploitation through algorithmic targeting.
The bill comes after the Federal Trade Commission (FTC) released a January staff report warning that companies increasingly use personal information — such as location, demographics, and even mouse movements — to adjust prices for goods and services.
According to the FTC:
“Retailers frequently use people’s personal information to set targeted, tailored prices… A consumer profiled as a new parent could be intentionally shown higher-priced baby thermometers.”
Delta’s partnership with Fetcherr and its AI revenue management strategy signals a broader trend in the travel and transportation sector. Airlines are exploring AI to help navigate volatile fuel prices, shifting post-pandemic demand patterns, and ongoing labor shortages.
Fetcherr’s AI pricing platform is designed to mimic stock market dynamics, adjusting prices in real-time based on numerous market variables — from macroeconomic indicators to real-time seat availability. While powerful, such models inevitably raise transparency and fairness concerns.
Despite the controversy, investors have reacted with cautious optimism. Delta shares (NYSE: DAL) rose 1.4% Friday following the company’s public response, reflecting investor confidence in Delta’s ability to manage AI implementation without triggering regulatory blowback.
Industry analysts, however, remain split.
Morgan Stanley aviation analyst Richard Hill commented:
“AI will inevitably change airline economics. But companies must tread carefully. Crossing the line into personal pricing is a reputational and legal minefield — and Congress is watching.”
While Delta has now publicly pledged not to use personal data for individualized fares, pressure from lawmakers and consumer advocates shows no sign of abating.
Expect greater regulatory scrutiny in the coming months, as AI tools proliferate across industries. For now, the travel sector remains a key battleground in the growing debate over algorithmic fairness, data ethics, and the power of artificial intelligence to reshape market behavior.
