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Delta's plans to use AI for ticket pricing is criticized by US lawmakers

Three Democratic Senators have asked Delta Air Lines' CEO Ed Bastian for answers about the airline’s plans to use artificial intelligence to determine ticket prices. They are concerned about the impact of this on travelers.

In a letter sent on Monday, Senators Ruben Galego, Mark Warner, and Richard Blumenthal said that Delta's current and future individualized pricing practices will not only raise privacy concerns but also increase fares up to the 'pain points' of each consumer at a time where American families already struggle with rising costs.

Senators cited comments made by Delta, a major airline in the United States. Delta plans to implement AI-based revenue management technologies across 20% of their domestic network before the end of 2025.

The report said that a Delta executive told investors earlier the technology can set fares by predicting "the amount of money people are willing pay for premium products in relation to base fares."

Delta said in a press release: "There are no fares that Delta has used, is currently testing or plans to implement which target customers with personalized offers based on their personal information or other."

Delta said that dynamic pricing is used by the company for over three decades. Pricing fluctuates depending on factors such as overall demand, but not personal information about a particular consumer.

Delta has said that AI-based dynamic pricing will be tested in order to eliminate manual processes and accelerate analysis and adjustments. It also stressed all customers would see the exact same fares and offers across all retail channels.

Delta announced that it is testing AI to forecast demand for specific routes, flights and adapt to market conditions instantly, factoring in thousands of variables at once and learning from every pricing decision in order to improve future outcomes.

Blumenthal, along with Senators Maggie Hassan & Josh Hawley, asked Frontier Airlines & Spirit Airlines in January to reveal whether they were using personal information of customers to charge passengers different fees on the same flight.

Senators claimed that airlines "appear to be using customers' personal data to charge different fees for seats to passengers on the exact same flight", despite the fact that the fare was the same.

Frontier and Spirit didn't immediately respond to Tuesday requests for comments on their current practice. David Shepardson, Leslie Adler, and Jamie Freed edited the article.

(source: Reuters)