Delta Will Start Using AI to Price Tickets

By the end of the year, Delta plans for 20% of its ticket prices to be individually determined using AI, president Glen Hauenstein told investors last week. Currently, about 3% of the airline's flight prices are AI-determined, triple the portion from nine months ago. The airline has partnered with Israeli company Fetcherr to deploy what Hauenstein calls "a super analyst" who is "working 24 hours a day, seven days a week" to determine your personal pain threshold.

Traditional airline pricing was already Byzantine—different fare classes, advance purchase requirements, weekend penalties. But at least it was comprehensible. You paid more for flexibility, less for restrictions, and everyone shopping at the same time saw the same options. Delta's AI doesn't just adjust availability; it creates bespoke prices that exist only for you, at that moment, based on algorithmic assumptions about your desperation.

The company frames this as innovation, promising "we will have a price that's available on that flight, on that time, to you, the individual." How delightfully personal—like getting a handwritten extortion note from your friendly neighborhood airline.

The Surveillance Economy Takes Flight

Consumer Watchdog argues that this creates an unfair system where consumers pay based on what companies assume they can afford. The practice, known as surveillance pricing, transforms every digital interaction into intelligence gathering. One example highlighted in the report involves the Target app, which charged consumers $100 more for a television depending on their proximity to a store.

Airlines are uniquely positioned to exploit this model because passengers already accept price variation—everyone knows the person next to them probably paid differently. But there's a crucial distinction between dynamic pricing based on demand and supply versus algorithmic price discrimination based on personal data profiles.

Privacy advocates noted Delta's development with concern. "They are trying to see into people's heads to see how much they're willing to pay," said Justin Kloczko, who analyzes so-called surveillance pricing for Consumer Watchdog, a California nonprofit.

Yet Delta insists their system is above board. A Delta spokesperson told Fortune 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." The spokesperson notably avoided answering follow-up questions about what those safeguards actually entail.

The $ fIGHT IN THE sKY

What Delta is describing is true individualized pricing - "a price available to you the individual" - meaning two people in the same neighborhood (even the same high density apartment/condo building) searching for the same flight at the same time could see completely different prices based on Delta's AI analysis of their individual data profiles, purchase history, loyalty status, perceived wealth, and willingness to pay.

The speed of this rollout is breathtaking. As you can see, by the end of 2025, Delta may be using its new AI technology to price 20% of tickets, which is an incredibly fast rollout, given how disruptive this could be. From 1% to 20% in a single year suggests either remarkable confidence in the technology or reckless disregard for potential consequences.

We haven't heard as much about AI pricing from other airlines, but we certainly will. To the extent that Delta is successful, we'll certainly be seeing other airlines match. This is the uncomfortable reality of airline innovation—one carrier's successful revenue enhancement quickly becomes industry standard.

The Regulatory Void

New York State Governor Hochul signed Part X of New York's annual budget, titled, "Personalized Pricing Transparency and Anti-Discrimination." Part X, which took effect on July 8, 2025, sets disclosure requirements for the use of algorithmic pricing and prohibits the use of certain consumer data to set prices.

But aviation exists in a regulatory netherworld. Technically, ticket rules already forbid the practice, he says. But these rules, called tariff requirements, aren't enforced by the government. Airlines file their fares publicly, but if every fare is individualized, what exactly are they filing?

The senators concluded that DOT has rightfully prohibited airlines from using information based on "race, creed, color, sex, religious or political affiliation, disability or national origin" to discriminate against customers. But, as the senators noted, DOT did not determine whether using other data, such as income, marital status, address or trip purpose, could be discriminatory.

dELTA'S ai pRICING

Delta's AI pricing represents the culmination of decades of airline industry evolution—from regulated utilities to ruthless profit maximizers. They've found the holy grail: a system that extracts not just what the market will bear, but what you, specifically, will bear.

The technology works because we've surrendered our privacy incrementally, trading convenience for surveillance. Every click, every search, every purchase becomes ammunition in a war against our own wallets. "If an airline figures out from your Facebook that your mother is dying on the other side of the country, should it be allowed to charge you $10,000 for a ticket to see her before she dies?"

The answer, legally, is probably yes. Ethically? That's where we might draw the line—if we still remember where we put it.

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