U.S. senators are demanding information from Delta Airlines over its plan to expand the use of artificial intelligence to craft individualized, surveillance-based fares.
Sen. Ruben Gallego, D-Ariz.; Sen. Richard Blumenthal, D-Conn.; and Sen. Mark Warner, D-Va., sent a letter to Delta CEO Ed Bastian seeking information regarding plans to vastly increase their pricing technology with the help of AI revenue management specialist Fetcherr.
"Delta's current and planned individualized pricing practices not only present data privacy concerns but will also likely mean fare price increases up to each individal consumer's personal 'pain point' at a time when American families are already struggling with rising costs," the senators said in their official statement.
"Consumers have no way of knowing what data and personal information your company and Fetcherr plan to collect or how the AI algorithm will be trained," the senators continued. "Prices could be dictated not by supply and demand but by individual need. While Delta has stated that the airline will 'maintain strict safeguards to ensure compliance with federal law,' your company has not shared what those safeguards are or how you plan to protect American families against pricing discrimination in the evolving AI landscape."
During a July 10 earning's call, Delta President Glen William Hauenstein told reporters that currently 3% of the airline's domestic ticket prices are already being set by AI with the goal of increasing to 20% by the end of the year.
"So, we're in heavy testing phase," Hauenstein said. "We like what we see. We like it a lot, and we're continuing to roll it out. But we're going to take our time and make sure that the rollout is successful, as opposed to trying to rush it and risk that there are unwanted answers in there."
The airline industry is expecting massive revenue increases by the use of a "personal demand curve," yet lawmakers are concerned it will translate to higher ticket prices and less incentive to improve service.
The senators are seeking answers by Aug. 4 as to what data inputs Delta uses to train its revenue algorithm; how many passengers are currently purchasing tickets set by AI pricing models; what routes will be affected by an increased rollout; and how the company has engaged with federal agencies over their policies.
James Morley III ✉
James Morley III is a writer with more than two decades of experience in entertainment, travel, technology, and science and nature.
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