US Lawmakers Raise Alarm Over AI-Driven Personalized Airline Pricing
Lawmakers express strong concerns over the potential use of AI for personalized airline ticket pricing.
Key Points
- • US lawmakers express concerns over AI use in personalized airline pricing.
- • Delta Airlines denies using AI for personalized ticket prices, stating it will not do so.
- • Democratic senators warn AI could lead to fare increases based on individual consumer data.
- • Proposed legislation aims to prohibit AI-based pricing using personal data.
Concerns have surged among U.S. lawmakers regarding the potential implementation of artificial intelligence for personalizing airline ticket prices. This matter was prominently addressed during comments made by Transportation Secretary Sean Duffy, who warned that any airline attempting to customize prices for individual consumers could face significant investigations. "To try to individualise pricing on seats based on how much you make or don’t make or who you are, I can guarantee you that we will investigate if anyone does that," Duffy stated, signaling a strong regulatory stance against such practices.
The apprehensions were echoed by three prominent Democratic senators—Ruben Gallego, Mark Warner, and Richard Blumenthal—who raised fears that airlines like Delta Air Lines might utilize AI to adjust prices in accordance to a consumer’s financial status, which could lead to increased fares tailored to what individuals can afford. In a proactive response, Delta has publicly stated that it does not and will not employ AI for pricing adjustments based on personal data.
However, the airline did announce plans to deploy AI-driven revenue management technologies across 20% of its domestic network by the end of 2025, in partnership with technology firm Fetcherr. This move underlines a balancing act between innovation and ethical considerations, as AI claims promise efficiency for airlines.
American Airlines CEO Robert Isom also voiced concerns over the potential erosion of consumer trust if airlines were to go down this path of AI-enhanced pricing models. In light of these worries, Democratic lawmakers Greg Casar and Rashida Tlaib have introduced legislation prohibiting the use of AI to manipulate prices based on private consumer data. This proposed law is particularly targeted at preventing airlines from exploiting sensitive information, such as a search for a family obituary, to set inflated prices.
While dynamic pricing—a practice airlines have utilized for over three decades—has been generally based on external factors like demand and competition, it has notably avoided the controversial approach of integrating individual consumer data into pricing mechanisms, raising significant ethical, legislative, and trust issues within the industry.