Delta Air Lines faces public backlash over its use of an AI-driven pricing tool developed by Fetcherr, intended to optimize airfare based on market demand. Analyst Henry Harteveldt notes the complexities of pricing in the airline industry, where perceptions of fairness play a crucial role. Delta aims to increase the percentage of its fares generated by this tool from 3% to 20%. However, concerns arose after Delta’s president suggested the potential for individualized pricing based on personal data, prompting scrutiny from senators and the Department of Transportation (DOT). Delta has claimed it uses only aggregated data for fare pricing, but mistrust persists. Other airlines like United and American are also exploring personalized pricing without resorting to discrimination. As the industry shifts towards more personalized retailing strategies, experts caution that the opaque nature of airline pricing could further complicate matters. Improved retailing is seen as vital for enhancing customer loyalty and maximizing revenue in a traditionally competitive environment.
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