Ticket prices are over. In this airline AI will set the price separately for each passenger
The mechanism resembles classic revenue management, but it gains turbo-charging thanks to AI. Fetcherr is feeding not only historical reservations and occupancy, but also weather data, calendars of events or market trends, and then estimates the maximum amount in real timeWhat a specific customer will be willing to pay.
Glen Hauenstein, president of Delta Air Lines, admitted to investors that the first results are “extremely beneficial” for unit revenues, which fuels the appetites of Wall Street.
From a passenger perspective, the list of benefits is less obvious. Airlines have different prices for years depending on the date of purchase or sales channel, but AI can aim much more precisely: one will show a discount, another – a higher rate if the algorithm recognizes it as “less sensitive to price”.
Critics even talk about “hacking our brains”. Justin Kloczko from the Consumer Watchdog organization warns that Delta “is trying to look into people's head”, and Senator Ruben Gallo describes the practice as a predatory price setting.
Delta herself assures that she does not tolerate discrimination and is based solely on “travel factors”, however Does not disclose the details of security or full rates of rates.
Delta and an unusual approach to price determination
This puts regulators and consumer organizations in a difficult position. Differentiation of prices is not illegal in the US until it depends on the features protected by law, such as gender or breed. The problem is that without a public base of all transactions It will be difficult to prove possible abuse.
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The lack of transparency also fakes controversy. Algorithms act like a black box, a Consumers do not know why they see this and not a different price. The image risk for Delta is real: the line that has been building a premium reputation for years can be received as a carrier maximizing profit at the expense of trust.
In an environment where tickets are a virtual commodity without a visible marginal cost, a sense of being pulled can quickly translate into customer loyalty.
Is Delta's decision controversial? From the investors' point of view – no, because he promises higher margins. From the point of view of passengers – by all means. Price differences have always existed, but until now have been seen as the result of general market rules. But when The algorithm begins to calculate our tendency to pay Based on digital traces, the border between fair competition and manipulation becomes dangerously thin.
If the line does not take care of transparency and clear rules, it may turn out that the AI profit will be eaten by the loss of confidence – a resource that cannot be recovered later with any algorithm.
Delta Air Lines shares have developed a loss of -7.32 percent since the beginning of the year. On a 12 -month scale, they provide a profit of 23 percent.
