The Independent. Delta’s AI pricing — good or bad? Experts give their verdicts
Delta Air Lines is handing over its ticket prices to artificial intelligence. And while that might be great news for shareholders, some passengers – especially in business class – may soon feel like they’re being out-negotiated by a machine.
As The Independent reports, Delta currently uses AI to price 3% of its flights, but wants that number to reach 20% by year’s end – and eventually, all flights will be ticketed using AI. The airline says this allows for more personalized pricing and better seat utilization.
The publication reached out to experts in the air industry and tech fields to get their take on the move, including virtual CTO and founder of 555vCTO.com.
AI ‘personalized’ ticket pricing will erode trust
Delta touts the move as more personalized pricing, but Vaclav Vincalek, also founder and CTO at Hiswai.com sees a deep problem: erosion of trust.
“As flashy and trendy as the announcement is, one should consider the emotional impact on customers when they find out that for the same row and aisle seat, somebody paid 20 percent less,” Vincalek told The Independent.
He likens it to a grocery store charging two customers different prices for the same carton of milk – a pricing method that may optimize profit, but risks alienating loyal fliers.
Delta’s AI Pricing is a super analyst for the skies…maybe
According to Delta, the AI system – built by Israeli startup Fetcherr – acts like a “super-analyst,” crunching numbers in real time to decide the optimal fare to entice a customer to book, or the highest price a customer might tolerate without skipping to a different airline.
In The Independent’s article, The Points Guy calls it a high-speed version of the pricing volatility we’re already used to: He says people are used to booking a flight then coming back the next day and seeing it jump – or drop – in price. He says to we’ll get more of that.
Think of it as dynamic pricing, but with machine learning – constantly adapting to demand patterns, traveler behavior, market conditions, and possibly even your digital footprint.
Can AI improve flight ticket inventory?
Some experts say the shift is overdue. Airlines have been stuck with rigid fare structures, and AI opens the door to smarter retailing.
The article’s other experts went on say that the AI-ticketing move could lead to:
Potential discounts for budget-conscious travellers
Last-minute deals to fill empty seats
Fare packages tailored to individual preferences
Can AI ticketing make ‘black box’ pricing worse?
But AI pricing isn't a win for everyone. In fact, it could mean higher fares for travelers who look like they can afford it. One expert said if Delta’s AI knows you consistently book higher prices, it may very well test higher prices on you.
That’s bad news for business travelers, whose patterns may flag them as price-insensitive.
Another expert called it a potential PR nightmare.
The experts at 555vCTO.com can help you scale your AI move
Delta isn’t the only company out there leveraging AI to improve business outcomes. Is your organization ready to make a move with AI? If so, contact the experts at 555vCTO.com to scale your software infrastructure in a way that will boost your bottom line – while not alienating customers. Ready to talk strategy? Send 555vCTO.com a message today.