Artificial Intelligence can price your next flight:
Delta, one of the nation's largest airlines, is making headlines after the president reveals plans to double his plans to use AI to dynamically set ticket pricing. Airlines plan to use AI to price up to 20% of domestic flights by the end of the year.
“We like what we see and we love it. We keep rolling out it,” Delta's president said on a recent investor call.
Clint Henderson says the travel website ThePointsGuy.com already uses a dynamic pricing model by integrating artificial intelligence and places it on steroids.
“Airlines already have a huge revenue manager looking to see what demand is like in different markets, the weeks to raise, the days to lower prices, the ways they sell their rate buckets, how they sell, and if they need to adjust their prices accordingly,” Henderson said. “So instead of priced 10 people, they'll have the machine doing it for them.”
However, Delta's plans are struggling with turbulence. Three U.S. senators sent letters to airlines raising privacy concerns, accusing Delta of using personal data to set separate prices.
CBS Philadelphia asked Delta for comment, and a spokesman said the airline did not use personal data to charge customers different fares.
“There are no fares that Delta has used so far. There are no tests or usage plans to target customers with individual offers based on personal information or anything else,” a Delta spokesperson said in an email. “The forces of various markets drive dynamic pricing models that have been used in global industries for decades, with new technologies simply streamlining this process, and Delta is always compliant with pricing and disclosure regulations.”
But Delta executives previously told investors that the technology could set fares based on what someone would be willing to pay for that ticket. Fetchel, the company that provides technology to Delta, previously boasted about “superpersonalization” of price.
Frequent flyer Rebecca Pershan says she's worried that her high-tech approach could make it difficult to know if you're doing a fair deal.
“I think we're at a disadvantage,” Perschon said, noting that she and her fiancé are usually limited to traveling on weekends and on holidays for work schedules. “The sad thing is, we need to build that into our travel budget every year.”
Henderson said that as more airlines use more data to set prices, what you pay will inevitably become more personal and predictable.
“Machines are better than humans when it comes to price, so prices can increase overall,” he said. “That's why airlines are investing in this.”
