Airlines Using Personalized AI Ticket Pricing Would Face Probe: Transportation Secretary
Authored by Victoria Friedman via The Epoch Times (emphasis ours),
Transportation Secretary Sean Duffy criticized the potential use of artificial intelligence (AI) to personalize airline ticket prices, saying on Aug. 5 that his department would investigate if any business were found doing so.
“Let’s sell prices on seats for what they should go for,” Duffy said in response to a question during a press conference on whether he had any concerns over airlines using AI to dynamically price tickets based on personal data, such as income. “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.”
Last week, Delta Air Lines told lawmakers that it does not and will not use AI to set prices for individual travelers.
Duffy said: “Delta has clarified that they are not going to do that. I’ll take them at face value and in their clarification, but we would engage very strongly if any company tries to use AI to individually price their seating.”
The Atlanta-based airline said last month it planned to expand its AI dynamic pricing pilot across more of its domestic network. Delta is running the pilot in partnership with Fetcherr, an AI pricing company.
Delta President Glen Hauenstein said during a second-quarter earnings call on July 10 that Fetcherr currently handles 3 percent of its domestic network and that the goal is for that to increase to 20 percent by the end of 2025. He added that Delta was in the “heavy testing phase” with AI.
“We’re going to take out time and make sure the rollout is successful,” he said.
On its website, Fetcherr says it is “trusted by the world’s leading airlines,” listing Delta, Virgin Atlantic, Westjet, Viva, and Azul.
Data Privacy Concerns
On July 21, Sens. Ruben Gallego (D-Ariz.), Richard Blumenthal (D-Conn.), and Mark R. Warner (D-Va.) wrote to Delta CEO Ed Bastian to clarify the airline’s plans to expand the use of AI to set individualized fares.
The senators said they believed that AI-based individualized pricing would not only present data privacy concerns but also mean that fare prices would increase up to “each individual consumer’s personal ‘pain point,’ at a time when American families are already struggling with rising costs.”
Delta responded on July 31, saying that the presupposition that the airline would use AI for individualized or “surveillance” pricing, which leverages consumers’ personal data or circumstances, was incorrect.
“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,” Delta Chief External Affairs Officer Peter Carter said in the letter to the lawmakers. “Furthermore, we have zero tolerance for discriminatory or predatory pricing and fully comply with applicable laws in privacy, pricing and advertising.”
The airline said that its AI-powered pricing functionality is designed to enhance its current pricing processes using aggregated data, noting that the functionality could recommend that prices go down as well as up.
Delta said it does not share any personal information with Fetcherr.
Carter added that for the past three decades, Delta and other airlines have been using dynamic pricing for seats and that pricing is influenced by a wide range of fluctuating market conditions, including customer demand, fuel costs, competition, and purchasing data at an aggregated level—but not on specific consumers’ data.
Proposed Legislation
In their letter, the senators said that the implications of AI-driven personal dynamic pricing for privacy “are severe on their own.”
Citing a January Federal Trade Commission (FTC) report, 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.”
Blumenthal, Gallego, and Warner said former FTC Chairwoman Lina Khan cautioned against a “particularly egregious but conceivable example” of an airline’s use of AI to charge a higher fare to a passenger because “the company knows that they just had a death in the family and need to fly across the country.”
On July 23, Reps. Greg Casar (D-Texas) and Rashida Tlaib (D-Mich.) introduced proposals that would ban companies from using AI to set prices or wages based on Americans’ personal data.
Casar said in a statement that the “Stop AI Price Gouging and Wage Fixing Act” would prohibit practices such as raising prices for a customer after seeing the customer search for a family obituary online.
The Epoch Times reached out to Delta for comment but did not receive a response by publication time.
Tyler Durden
Fri, 08/08/2025 – 14:05
