Delta Air Lines is facing mounting scrutiny over concerns about its use of artificial intelligence in ticket pricing. Following direct inquiries from U.S. lawmakers, Delta denied the use of AI to set personalized ticket pricing based on individual consumer data. The company insists that fares are determined by traditional factors such as demand and competitive pricing and does not account for user behavior or demographics.

However, that hasn’t stopped the broader debate of AI’s growing role in consumer pricing.

Delta admitted it is piloting AI-based revenue management tools developed to help streamline manual processes and optimize fare forecasting. While the company framed the effort as purely operational, some lawmakers and consumer advocates argue the technology’s implications reach further, particularly when used without oversight or transparency.

As pricing becomes increasingly data-driven across industries, the airline sector is emerging as a battleground for the ethical limits of algorithmic decision-making.

Why It Matters: AI-based revenue management has the potential to reshape pricing architecture across the consumer-focused sectors. While the technology offers significant operational efficiencies, its use by corporations is raising regulatory and ethical questions. Delta’s public statements indicate the need for transparency and dialogue on how far predictive pricing should go before it becomes perceived as discriminatory or exploitative.

• Delta’s Formal Denial: In its formal response to U.S. Senators Ruben Gallego, Mark Warner, and Richard Blumenthal, Delta reiterated that no fare products in current use or development leverage personal data for individualized pricing. The company emphasized that its pricing system is not designed to identify or exploit a customer’s financial status, demographics, or online behavior.

• AI’s Role in Revenue Management: Delta is actively piloting AI-driven tools to streamline fare analysis and shorten response cycles in its revenue management functions. The airline disclosed that the project will cover 20% of the domestic network by the end of 2025 to help forecast demand and improve pricing efficiency. Delta claims the system merely assists analysts by replacing manual processes and enabling faster responses to market shifts, such as fluctuating fuel prices or competitive pressures, aligning with larger trends in developing human-AI workflows.

• Lawmakers Wary of Algorithms: Lawmakers remain skeptical, citing a 2024 comment by Delta President Glen Hauenstein indicating that AI could estimate “the amount people are willing to pay” for certain price tiers. This phrasing suggests the possibility of value-based or “first-degree” price discrimination, in which AI sets prices to extract maximum payment from each individual. This has prompted calls for increased transparency around AI’s role in pricing, especially in heavily regulated industries like aviation.

• Personalized Pricing Models Under Regulatory Watch: The Federal Trade Commission and multiple legislators are tracking the expansion of personalized pricing across sectors. Civil subpoenas and policy reviews are becoming increasingly focused on how firms collect behavioral data and to what extent these factors influence price setting. Though Delta maintains its AI program does not rely on this targeting, the industry at large faces growing pressure to disclose methodologies and safeguard consumer data in algorithmic pricing.

• Industry Implications: AI Integration Must Be Strategically Scoped: As more consumer-centric platforms experiment with AI-driven pricing architecture, the need for internal governance frameworks is intensifying. Industry analysts emphasize that pricing algorithms should be ethically bound, auditable, and aligned with brand strategy. Prioritizing margin gains without clear communication or consumer protections risks undermining loyalty and triggering regulatory intervention. For revenue management teams, the long-term viability of AI integration will depend on balancing short-term yield gains with reputational and compliance considerations.

Go Deeper -> Delta denies using AI to set flight prices – FOX Business

Delta Air Lines assures U.S. lawmakers it won’t personalize fares using AI– Reuters

Personalized pricing has spread across many industries. Here’s how consumers can avoid it – PBS News

Will AI Pricing Lose Customers? – Forbes