Delta faces scrutiny from Democratic senators over AI ticket pricing plans

A group of Democratic senators is demanding answers from Delta Air Lines over the carrier’s planned implementation of artificial intelligence to set the prices of its tickets, while the airline says consumers will all see identical fares.

In a letter dated Monday, Sens. Ruben Gallego of Arizona, Mark Warner of Virginia and Richard Blumenthal of Connecticut confronted Delta CEO Ed Bastian with questions and concerns about the initiative.

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The three lawmakers – citing worries about data privacy and how American households are already burdened with increased expenses – referred to Delta’s recent comments that it plans to implement AI technology across 20% of its U.S. network by the end of the year.

The crew of Flight 1203 bound for Portland International Airport returned to Salt Lake City international after reporting a pressurization issue. (Getty Images / Getty Images)

“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 individual consumer’s personal ‘pain point’ at a time when American families are already struggling with rising costs,” the senators wrote in the joint letter.

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The lawmakers also pointed out that Delta President Glen Hauenstein previously told investors that the AI has the ability to set prices based on a prediction of “the amount people are willing to pay for the premium products related to the base fares.”

Sen. Richard Blumenthal, D-Conn., speaks during a news conference at the U.S. Capitol on Oct. 12, 2022, in Washington, D.C. (Chip Somodevilla/Getty Images / Getty Images)

“The implications for individual consumer privacy are severe on their own,” the lawmakers said. “Surveillance pricing has been shown to utilize extensive personal information obtained through a variety of third-party channels, including data about a passenger’s purchase history, web browsing behavior, geolocation, social media activity, biometric data, and financial status.”

Delta, working in partnership with AI pricing company Fetcherr on the initiative, said that its customers will all see identical prices and offers. 

The airline pointed out that dynamic pricing, in which fares change based on factors like demand, has been used for more than 30 years. Delta is testing AI for dynamic pricing to eliminate manual processes and speed up its analysis and adjustments, Reuters reported.

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“There is no fare product Delta has ever used, is testing, or plans to use that targets customers with individualized offers based on personal information or otherwise,” a Delta spokesperson told FOX Business in an email. “A variety of market forces drive the dynamic pricing model that’s been used in the global industry for decades, with new tech simply streamlining this process. Delta always complies with regulations around pricing and disclosures.”

Delta CEO Ed Bastian at the Hope Global Forums annual meeting in Atlanta, Georgia, on Dec. 11, 2023. (Dustin Chambers/Bloomberg via Getty Images / Getty Images)

Delta said it has been testing AI technology to adapt to market conditions, forecast demand and factor many variables at the same time. It also noted that the technology would learn from pricing decisions to improve future decisions, according to Reuters.

Earlier this year, Blumenthal and Sens. Maggie Hassan, D-N.H., and Josh Hawley, R-Mo., similarly asked Spirit Airlines and Frontier Airlines for information about whether they were using customers’ personal information to charge different fees to passengers.