American Airlines' CEO Is Skeptical of AI Fare Pricing

Does the next big thing for AI software involve optimizing airfares? The president of Delta Airlines has spoken about that company’s growing reliance on the algorithm to determine fares, indicating that Delta plans to have AI determine pricing for a growing number of flights in the coming months. That doesn’t mean that the whole industry is on board, however — and the head of another airline has publicly taken a much more skeptical view of this technology.

That would be American Airlines CEO Robert Isom. As Sean Cudahy reports at The Points Guy, Isom was, shall we say, skeptical about the prospect of American using AI to calculate airfares. “I don’t think that’s appropriate,” he said on an earnings call this week.

“I quite frankly think that some of the things I’ve heard are just not good,” he added. Later in the call, he added, that “from American, it’s not something we will do.” He did mention that the airline was using AI technology in its business — just not to determine airfares.

It isn’t hard to see why Isom — or any airline chief executive — would be concerned about putting AI technology in such a public-facing position. It hasn’t been that long since a Canadian court ruled that Air Canada was liable for incorrect information that one of its chatbots had provided a customer, after all — and it isn’t difficult to imagine chaos if an AI hallucination resulted in a mistake fare or something even more off-base.

AI Pricing Is Coming to Airfares — With One Airline Leading the Way

What effect will this have on travelers?

For the broader industry, there’s also the question of whether the government could intercede to regulate the use of AI to determine airfares. This week, a trio of senators — Mark Warner, Ruben Gallego and Richard Blumenthal — raised questions over Delta’s AI policy.

“Individualized pricing, or surveillance-based price setting, eliminates a fixed or static price in favor of prices that are tailored to an individual consumer’s willingness to pay,” the senators said in a statement. “Delta’s current and planned individualized pricing practices not only present data privacy concerns, but will also likely mean fare price increases up to each individual consumer’s personal ‘pain point’ at a time when American families are already struggling with rising costs.”

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Tobias Carroll

Tobias Carroll lives and writes in New York City, and has been covering a wide variety of subjects — including (but not limited to) books, soccer and drinks — for many years. His writing has been published by the likes of the Los Angeles Times, Pitchfork, Literary Hub, Vulture, Punch, the New York Times and Men’s Journal. At InsideHook, he has…