Airlines Say Ai Won't Set Fares By Passenger. Experts Aren’t So Sure.

Could AI make your flights more expensive? Here’s what we know now.

Airlines are exploring AI-driven pricing models that could reshape how travelers shop for flights, but at what risk? Here's what we know now.

• Airlines are exploring using AI to help set airfares, leading to concerns about individualized prices.
• Currently, airlines claim AI is used with aggregated data, not personalized information, to streamline pricing analysis.
• Consumer advocates urge regulators to monitor these developments to prevent potentially discriminatory pricing practices.

Cruising Altitude is a weekly column about air travel. Have a suggestion for a future topic? Fill out the form or email me at the address at the bottom of this page.

It’s no secret that airline pricing can be opaque and confusing to many travelers – even to experts. 

When I spoke to William J. McGee, senior fellow for aviation and travel at the American Economic Liberties Project, we joked that one of the worst questions an aviation expert can get asked at a party is, “how do I find a good deal on airfare?” The answer is usually best represented by the shrugging emoji:  

¯\_(ツ)_/¯ 

However, flight pricing is getting a renewed round of attention after Glen Hauenstein, president of Delta Air Lines, acknowledged on the company’s earnings call last month that the airline is testing a new AI tool to help set its fares. 

Panic from consumers, advocates and even lawmakers naturally ensued as the specter of a new way for corporations to squeeze every penny out of us appeared on the horizon.  

For now, Delta (and other airlines) insist that they’re not using AI to make prices truly individualized, but as technology gets more sophisticated, the already-dynamic pricing model used in the aviation industry is likely to get more granular. 

Again, I say:  ¯\_(ツ)_/¯ 

“This is such an opaque process, there is so much that we don’t know about what they know about us,” McGee said.  

Airlines acknowledge using some of our personal data in setting prices even now but say that such information is used only in the aggregate, not to tailor fares to individual travelers. 

In a letter to senators after last month’s earnings call, Delta Air Lines’ Executive Vice President of External Affairs, Peter Carter, explained how the carrier does and doesn’t use passenger data for setting prices. 

“There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized prices based on personal data. ... Our AI-powered pricing functionality is designed to enhance our existing fare pricing processes using aggregated data,” the letter said. “Given the tens of millions of fares and hundreds of thousands of routes for sale at any given time, the use of new technology like AI promises to streamline the process by which we analyze existing data and the speed and scale at which we can respond to changing market dynamics.” 

Still, McGee said airlines have a history of testing the limits of price differentiation. 

“It’s really a much longer story going back 20 or 25 years at least. The technology has improved for them, and that has increased the airline industry’s ability to tailor surveillance pricing, individualized pricing,” he said. 

For now, Delta says it’s just using AI technology to streamline the work of its human analysts, who ultimately set and file its fares. 

Kyle Potter, editor of Thrifty Traveler, a travel and flight deal website, said it makes sense that airlines don’t have the technical capability right now to target prices at specific passengers, because the system airlines use to file their fares relies on outdated technology. 

“The technology in how airlines set fares and distribute them to their own website and other third-party sites, is really a roadblock to offering truly individualized airfare,” he said. “There’s no way to weave in the massive amount of data that airlines have or could have into offering a truly dynamic set of prices that varies from person to person. That’s just not possible today at any kind of scale that I’m aware of.” 

For a third time I say:  ¯\_(ツ)_/¯ 

There are just too many variables to be sure about how all this will develop. 

“Where we’re at right now is that we’re going to come to look at Delta’s comments last month to investors as a trial balloon for just how far Americans would be willing to go to accept some level of personalized pricing,” Potter said. “The answer, at least for the last month, has pretty clearly been not at all.”  

Delta, which is the poster child for pricing developments in the airline world right now, insists it has no intention to ever set truly individualized prices. 

“There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized prices based on personal data,” Carter’s letter said. 

But McGee, who works as a consumer advocate, said it’s important for both passengers and regulators to not get complacent as predictive pricing technology gets more powerful. 

“It’s going to be very hard, but it’s necessary, for regulators and legislators to get their hands around this and understand it,” he said. “It’s not unimaginable that if this goes unchecked and there’s not action by Congress or (the Department of Transportation), we may all be paying a different fare for the same flight within a few years. That’s going to be a tough thing to undo.” 

Potter agreed with McGee’s assessment. 

“I think what we saw this year, what we’ve seen again and again and again over the last several decades is that airlines will do whatever it takes to charge people the highest fares possible within the constraints of the technology that they currently have,” he said. “The global airline industry has been trying to push towards a future of personalized airfare. Just because there’s a backlash now doesn’t mean this isn’t going to happen eventually.” 

For one final time, I say: ¯\_(ツ)_/¯ 

Airfares are subject to change at any time, and the prices are set by people working in a black box behind a curtain. 

In general, the advice experts have always given me is to trust your gut. If you feel like you’re getting a good deal on airfare when you look for flights, you probably are. Also: it’s a good idea to leverage consumer-facing price prediction tools, like those available on Google Flights, Expedia and other airfare aggregators. 

Zach Wichter is a travel reporter and writes the Cruising Altitude column for USA TODAY. He is based in New York and you can reach him at zwichter@usatoday.com.