American, Delta Take Opposite Sides of AI Pricing Debate

Count American Airlines among the humans opposing a robot takeover. At least when it comes to pricing tickets.

On Thursday, CEO ​​Robert Isom told analysts after the company’s earnings call that he opposed using artificial intelligence for so-called “personalized pricing” of individual customers’ air fares, calling the tactic a “bait and switch.” That sets American apart from competitor Delta Air Lines, which last week enthusiastically embraced the tech as a future pillar of the company.

AI Takes Flight

Delta’s AI pricing plans aren’t just plans — they’re already here. In its earnings call earlier this month, Delta said that about 3% of domestic tickets sold this year have been priced using AI technology provided by Fetchr, an AI pricing firm. That’s up from about 1% of tickets sold last year, and a stepping stone to a 20% share the airline hopes to hit by the end of the year. Eventually, Delta plans to use AI to price 100% of its tickets.

The 1% pilot program already produced “amazingly favorable” results, President Glen Hauenstein reportedly told investors during a November meeting last year, according to a recent Fortune investigation. Unsurprisingly, skeptics want a look under the hood:

• Earlier this week, a trio of US senators pressed Delta CEO Ed Bastian to answer questions about the airline’s pricing strategy, flagging concerns over privacy and the potential for price gouging, and inquiring about the personal data Delta uses to set prices.
• In a December report providing a broad overview of the impacts of personalized AI pricing across industries, the aptly named consumer watchdog group Consumer Watchdog found that “the wealthier a person is, the less they’re likely to pay, and vice versa. A lower credit score means higher prices offered to consumers of many products.”

Delta has pushed back. “There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized offers based on personal information or otherwise,” the airline said in a statement earlier this week.

2025 Turbulence: Delta’s AI hype party was meant as a cherry on top of a positive earnings sundae. The airline reported a 63% profit jump and forecasted stabilizing demand, sending its shares soaring immediately afterward. American, on the other hand, saw its share price tumble 10% Thursday after it lagged profit expectations in the most recent quarter and reinstated its 2025 forecast with a much lower outlook than at the beginning of the year.