ORLANDO, Fla — Artificial intelligence could help determine the price you pay for airline tickets next time you fly. It’s possible it may have already happened.
Earlier this year, Action 9 looked into how personal information could be used to set your individual price on products you buy at stores. It’s often called surveillance pricing.
Now, Delta Airlines is coming under fire for how its embracing AI technology to determine prices.
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During its 2024 investor day in November, Delta’s president, Glen Hauenstein, acknowledged at that time 1% of its network was pricing flights using an AI firm that shows on its website that it helps companies, “redefine how they maximize profit and optimize workflow.”
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Glen Hauenstein said, “It’s going to be a multi-year, multi-step process as we continue to learn, innovate, teach the machine, change the business process, but the initial results show amazingly favorable unit revenues versus the beta.”
In April, Action 9 reported on how so-called surveillance pricing works.
Orange County shopper Valerie Salazar said, “I like to feel things and make sure it’s what I want.”
Salazar prefers to shop in person, but with a busy life and a young daughter in the house online shopping is often easier. But when shopping at home, it’s difficult for shoppers like her to know if they price they see on the screen is the same price their next-door neighbor is seeing. Companies can use that online isolation to target different people with different prices.
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Sara Geoghegan with the Electronic Privacy Information Center said, “Companies know so much about our online shopping habits. Companies have very, very granular, detailed, robust profiles about us as consumers.”
Geoghegan explained consumers could get charged a different price based on their shopping habits or history, demographics, geographic location, or a wealth of other personal information retailers have on them.
In November, Delta’s president suggested individual pricing could be in the future.
Hauenstein said, “We will have a price that’s available on that flight, on that time, to you, the individual, not a machine that’s doing an accept, reject and a static price grid.”
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Then earlier this month, he called it a testing phase that’s now at 3% percent of flights and said Delta’s goal is 20% of flights priced using AI by the end of the year.
That led to criticism from people like U.S. Senator Ruben Gallego of Arizona who wrote on social media site X:
If Delta thought they could use a black box AI algorithm to jack up prices and no one would notice, they should think again.
I’m leading my colleagues to demand answers from Delta’s CEO. I won’t stand by while Americans get ripped off
While Delta has been clear it’s using artificial intelligence, it hasn’t said specifically how its AI system determines prices.
A Delta spokesperson sent this statement:
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 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.
Valerie Salazar doesn’t like the idea of any company ever using her personal information to set her price.
Salazar said, “I never would have thought that, oh, they’re going to charge so and so $2 cheaper than what I’m getting it for. So... not cool.”
The Federal Trade Commission started looking into surveillance pricing before the start of the Trump administration, but its status right now is unclear.
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