Delta CEO Ed Bastian says AI could boost profits by 50% as airline tests AI-set fares on 3% of tickets

Delta Air Lines CEO Ed Bastian revealed during a podcast interview that artificial intelligence could potentially boost the company's profitability by up to 50%. Currently, AI is influencing around three percent of Delta's fares, with a target of expanding to 20% by the end of the year. The airline is collaborating with Fetcherr, an AI pricing company, to determine fares more effectively.

This advanced AI system functions as a "super analyst" that operates continuously to determine the optimal price for a flight at any given moment. In the future, Delta envisions a system called "offer management," where pricing and inventory management would be integrated, creating personalized prices for customers based on their specific flight, time, and location.

Consumer advocates and lawmakers have expressed concerns about the potential for individualized pricing, which could involve charging different prices to individuals based on their personal information and willingness to pay. Delta has clarified that it does not currently use personal data to set fares and does not have plans to implement discriminatory or predatory pricing practices.

The airline emphasizes that its AI-powered pricing functionality is designed to enhance fare pricing processes using aggregated data, such as demand, competitive pricing, and market conditions.