Delta’s AI will set custom flight prices based on what you’ll pay

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Delta Air Lines says it’s finished playing the “everyone pays basically the same” game.

According to a Fortune report, Delta is moving aggressively to let artificial intelligence determine what each passenger is individually willing to shell out for a ticket, with the goal of having 20% of all fares set this way by the end of the year.

“This is a full reengineering of how we price and how we will be pricing in the future,” Delta president Glen Hauenstein told investors, according to Fortune. “We will have a price that’s available on that flight, on that time, to you, the individual.”

This isn’t a someday-maybe experiment; it’s already rolling out. About 3% of Delta’s fares are now set by AI, triple what it was just nine months ago, Hauenstein told investors last week.

Delta’s power move comes thanks to a partnership with Fetcherr, an Israeli tech company that’s already running similar pricing for other airlines including WestJet and Virgin Atlantic, according to PhocusWire.

Fetcherr’s AI acts like “a super analyst,” Hauenstein explained, constantly simulating millions of scenarios to determine what price you might accept.

Delta has been unusually open about its plans, but industry insiders say other carriers are right behind them.

“Personalized pricing has been an airline goal for the past decade and a half,” travel industry authority Gary Leff told Fortune. “Delta is the first major airline to speak so publicly about its use of AI pricing, to tout it for its potential upside at its investor day in the fall and to offer concrete metrics around its use in its recent earnings call.”

Not everyone is thrilled. Privacy advocates and consumer watchdogs say this raises red flags about fairness and transparency.

“They are basically hacking our brains,” said Justin Kloczko, an analyst at Consumer Watchdog, in an interview with Fortune. Sen. Ruben Gallego (D-Ariz.) called the practice “predatory pricing,” vowing to push back.

Delta, for its part, insists its fares are above board. “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,” a Delta spokesperson told Fortune.

The airline did not directly answer follow-up questions about how those safeguards work or whether they’re managed by humans or automated systems.

For years, airlines have quietly offered different prices based on how and when travelers book, sometimes even changing fares based on whether you’re searching from a certain browser or device.

But as Matt Britton, author of Generation AI, told Fortune, this new generation of AI-driven pricing “isn’t just optimizing business operations, but fundamentally rewriting the rules of commerce and consumer experience.” Britton warns,

“The era of ‘fair’ pricing is over. The price you see is the price the algorithm thinks you’ll accept, not a universal rate.”

There are legal limits: airlines can’t charge different rates based on sex or ethnicity, and using certain identifiers like ZIP codes can run afoul of anti-discrimination rules.

1But because there’s no public record of all fares, it’s practically impossible to verify if AI-driven pricing is quietly crossing those lines.

What about passengers? In the short term, you might see discounts if Delta’s AI gets desperate to fill a seat, says Leff. But over the long haul, as more airlines move to these models, expect to be nudged into logging in for any “special” deal, and to see fewer of the old-fashioned bargains.

Early research, according to Consumer Watchdog’s findings cited by Fortune, suggests AI-powered pricing often gives the best deals to wealthier fliers, while those with the fewest options end up paying the highest fares.

Reporting for this story draws on coverage from Fortune and PhocusWire, and interviews with industry experts and consumer advocates.

Do you think AI-driven personalized airline pricing is innovative customer service or discriminatory price manipulation? Or is this just the natural evolution of how businesses have always tried to maximize profits? Tell us below in the comments, or reach us via our Twitter or Facebook.

Kevin Raposo

Kevin is KnowTechie's founder and executive editor. With over 15 years of blogging experience in the tech industry, Kevin has transformed what was once a passion project into a full-blown tech news publication. Shoot him an email at kevin@knowtechie.com.