Delta Air Lines is moving deeper into AI pricing, and the experiment is drawing sharp concern from consumer advocates, privacy experts, and at least one lawmaker. The airline says it uses trip-related factors and safeguards, while critics argue that personalized fares could make the price of a flight depend less on the seat and more on what a system believes a traveler will pay.
What Delta is testing
On an earnings call last week, Delta Air Lines President Glen William Hauenstein said seats on about 3 percent of domestic flights were sold through the AI pricing system over the past six months. By the end of the year, Delta’s goal is to boost that to 20 percent of tickets.
The system is part of a pilot program that has already caused customers to pay different prices for the same flights based on their data profile. Delta has become the first airline to announce that it is using AI to boost profits by personalizing pricing in this way.
The idea goes beyond the familiar airline practice of charging less to travelers who book early and more to people who buy close to departure. Critics say the new model could turn individualized data into a direct input for fare decisions, making cheap flights harder to find if other airlines adopt the same approach.
Last November, Hauenstein told investors that Delta’s goal is to eventually get rid of static pricing entirely, Fortune reported. The company is still describing the feature as being in a “heavy testing phase,” but it has also told investors that the early results are helping revenue.
“We like what we see,” Hauenstein told investors on the earnings call. “We like it a lot.”
Why critics call it surveillance pricing
Consumer Watchdog has warned that individualized pricing could theoretically lower prices for some Delta customers. The problem, it says, is that without public reporting on how the pricing works, travelers cannot know whether it is fair or whether it may be violating federal laws that prohibit different rates based on protected classes, like sex or ethnicity.
Fortune reported that, when this kind of pricing is used, “the best deals were offered to the wealthiest customers—with the worst deals given to the poorest people, who are least likely to have other options.” That concern sits at the center of the debate: a system built to maximize revenue may not distribute benefits evenly.
George Slover, general counsel for the Center for Democracy and Technology, warned last fall that tailoring prices based on a customer’s “identity, preferences, and situation” could create risks that go beyond a single airline. He suggested that such pricing could even help airlines collude to spike prices.
Slover has also argued that customers may be kept in the dark about the AI models while being charged more. So far, Delta has not confirmed when it may release public records showing the pricing variance occurring from its pilot program.
“The very fact that Delta is saying that the early results of this intrusive pricing scheme ‘show amazingly favorable results’ says it all,” Slover said in a statement provided to Ars. “They are increasing their profits, and those profits are coming from the consumers they are taking advantage of.”
The data behind personalized fares
According to Slover, companies like Delta could vary prices using data such as a customer’s web-browsing activity, prior purchases, product searches, or their “income, assets, debts, and financial condition and history.” Past purchases could suggest what a person is willing to spend on similar items. Social data could suggest whether a flight is urgently needed.
Those inputs could matter because they may show when a consumer is more exposed to pressure. Slover suggested that these signals could “indicate the consumer is more susceptible to sales-pitch puffery or pressure.”
Supporters of more dynamic pricing could argue that AI pricing might increase competition in the airline industry. Slover’s concern is that opaque systems are “all too likely” to push in the direction of higher prices because travelers do not know what data is being used or how the final fare is calculated.
“Informed consumer choice is the engine that drives competition; because consumers won’t be as informed, and thus will have little or no agency in the supposed competitive benefits, they are more apt to be taken advantage of than to benefit,” Slover said.
Delta’s response and the Fetcherr partnership
Delta has partnered with Fetcherr for the pilot. Fetcherr is an Israeli company that “also counts Azul, WestJet, Virgin Atlantic, and VivaAerobus as clients” and plans to expand into other travel industries once its technology becomes established in the airline industry, Fortune noted.
Slover expects that technology like Fetcherr’s will be “irresistible” to companies that see a chance to raise revenue through individualized pricing. If that happens, Delta’s pilot could become a model for broader travel pricing systems.
Delta declined Ars’ request to comment. A spokesperson told Fortune that the airline “has zero tolerance for discrimination. Our fares are publicly filed and based solely on trip-related factors like advance purchase and cabin class, and we maintain strict safeguards to ensure compliance with federal law.”
That statement points to Delta’s core defense: the airline says fares are tied to the trip, not personal traits. Critics say that public filing and compliance safeguards do not answer the larger transparency question if customers still cannot see how AI pricing is affecting the price they are offered.
Pressure from regulators and lawmakers
The Federal Trade Commission is already studying how individualized pricing like Delta’s pilot could potentially violate the FTC Act or harm consumers. Solver said that scrutiny could lead to new rulemaking or possibly legislation “to prohibit or rein it in.”
Some lawmakers are also scrutinizing pricing algorithms. Slover noted that pricing practices at giants like Walmart and Amazon have been targeted in recent hearings held by the Senate Committee on Banking, Housing, and Urban Affairs.
At least one lawmaker, Sen. Ruben Gallego (D-Ariz.), has explicitly vowed to block Delta’s AI plan.
“Delta’s CEO just got caught bragging about using AI to find your pain point—meaning they’ll squeeze you for every penny,” Gallego wrote on X. “This isn’t fair pricing or competitive pricing. It’s predatory pricing. I won’t let them get away with this.”
For travelers worried about personalized pricing, Slover recommended using a virtual private network (VPN) when shopping as a short-term step. Longer term, he said stronger privacy laws could limit the data available to AI tools that raise or lower prices.
He also suggested that third-party intermediaries could help by “restoring anonymity” to the shopping process, acting as a “purchasing agent.” Ideally, he said, those third parties would not collect data themselves, and nonprofits like Consumer Reports could be good candidates to offer that kind of consumer protection.