Amid Delta’s AI Pricing Scheme, Groundwork Applauds Congressional Action to Crack Down on Surveillance Pricing Schemes

Amid Delta's AI Pricing Scheme, Groundwork Applauds Congressional Action to Crack Down on Surveillance Pricing Schemes

Delta’s Pricing Strategy “Should Be a Wakeup Call for Policymakers,” Says Groundwork’s Owens

Groundwork Collaborative endorsed legislation introduced today by Congressman Greg Casar (D-TX) to prohibit surveillance pricing and algorithmic wage setting. The legislation would prevent companies from using artificial intelligence to set prices based on consumers’ personal data. The bill comes on the heels of a letter from U.S. Senators Ruben Gallego (D-AZ), Richard Blumenthal (D-CT) and Mark Warner (D-VA) to Delta’s CEO demanding answers in the wake of the company’s plan to deploy AI pricing tools across 20 percent of its domestic flights in the coming months.

Groundwork Collaborative Executive Director Lindsay Owens issued the following statement: 

“Delta’s announcement should be a wakeup call for policymakers. The airline industry has pioneered and then exported some of the most opaque, unpredictable, and frustrating pricing practices consumers face across the economy. Now, consumers are at risk of their data being used against them, with companies using their purchase history, personal financial information, and more, to charge them as much as they possibly can for every flight they book. Any form of surveillance pricing is invasive and predatory–and it shouldn’t be legal. Lawmakers must crack down on surveillance pricing now, before it is too late.”

Owens recently joined a panel hosted by the American Economic Liberties Project to discuss why Delta’s latest announcement is just the tip of the iceberg when it comes to corporations utilizing surveillance pricing to gouge consumers: 

“Airlines have always collected a lot of data about you,” Owens said. “You have a frequent flier account. You often log in before you purchase. They know your history: where you like to go for Christmas, where you like to go for spring break. You might also use a credit card from one of the airline companies. They’ve collected a lot of information on you. Now [Delta] is perfecting the technology to use that information and other information they have available to them, which they may be buying from third parties, to set pricing based on your willingness to pay. This is incredibly concerning, and I think we should expect other airlines to follow suit. It will only be a matter of time before this becomes standard fare, if you will, for corporate America when it comes to pricing.”

Background on the airline industry and surveillance pricing: 

• At its 2024 Investor Day, Delta detailed how it is using AI to price fares, specifically citing opportunities to hike prices:
  • At Investor Day 2024, Delta revealed it was undergoing a “full reengineering of how we price and how we will be pricing in the future” in partnership with Israeli AI company Fetcherr.
  • Delta’s President stated on the call: “Generally, we match our competitors’ fares and they may or may not be available. But if we take small increments and say to Tokyo, could we take a $20 increase in our fares and not see a decline in market share? Could we take a $40? It’s doing that real-time now.”
• Delta planned to go from AI pricing 1% of domestic fares in 2024 to 20% by the end of 2025:
  • Delta’s President: “Well, we have about 1% of our O&Ds in 1% of our revenue, and we’re learning. One of the things we learned is that it does better if you give it an entire city rather than a market.” 
  • Delta’s CEO told analysts Fetcherr was pricing 3% of their domestic fares as of July 2025, and they were hoping for 20% by end of the year.
• Fetcherr is an AI pricing vendor used by Delta that utilizes what they call an “aggressive algo trading system.”
  • Fetcherr’s Co-founder stated: “I think that the most interesting thing that the system can do, it’s because it’s an aggressive algo trading system, it has a tactical pricing approach. It means that it lets our customer take advantage of the vulnerability of their competitor’s rule based system by understanding the rules and then manipulating the market in order to gain more profit.”
• Another AI pricing vendor called FLYR offers a “dynamic pricing engine” and reported managing $14 billion in airline revenue in 2021. Today, it is the vendor utilized by Jetblue and Virgin Atlantic, and reports offering “dynamic pricing, real-time recommendation,” and “personalized offers” by utilizing data that includes preferences, past engagement, loyalty status, location, and more. 
  • Jetblue described its partnership as “maximizing opportunities across the business, enabling quick, precise capacity plans and pricing adjustments.”
  • Virgin Atlantic touted how FLYR enables “a dynamic pricing model that responds to a range of variables including route, seat zone, and traveler demand.”
• PROS is a longtime airline pricing vendor now pitching a “willingness to pay” AI model to maximize price per customer. 
  • PROS Executive Justin Jander touted how the software hikes costs for those who must travel: “Many passengers think of the product as simply their seat on the plane, but in reality, the product also includes the timing of when the ticket was bought. A business traveler who needs to fly tomorrow to close a $10 million deal is more willing to pay a higher price than someone visiting their grandmother for her 50th anniversary, whose willingness to pay is much lower.”
  • PROS cited Hawaiian airlines reserving seats for higher-paying customers rather than discounting them as a way to boost revenue: “In running the PROS WTP model without manual intervention, Hawaiian Airlines saw better revenue performance by holding out for higher-paying customers. ‘This automated approach outperformed the manual rules, giving the airline confidence in the solution and helping maximize revenue,’ Jander said. ‘This also meant that by holding seats for higher-paying customers, the airline avoided the risk of having to turn away passengers or send them to a competitor.’”
  • A Harvard MBA Case Study from 2022 suggested Southwest was using AI models “to identify a customer’s willingness to pay, and extract as much as possible in the fare.” 
    • A LinkedIn post by an executive at PROS – a revenue management firm – noted that after noticing a drop in demand, Southwest’s “AI system quickly responded by reducing the number of low-fare seats allocated for that period and retained more seats for higher-paying customers as the demand recovered.”
  • Lufthansa Group uses PROS AI to set pricing and drive up prices during the holiday season or extreme weather events. 
    • A PROS press release advertised how the airline is using AI to “maximize revenue across every seat, on every flight, every day.”
    • A PROS LinkedIn post brags that Lufthansa used AI to adjust prices up in high demand periods like holidays and weather events to capture more revenue.
  • British Airways also utilizes PROS to use “customer’s booking history, loyalty program engagement, and online behavior” to set prices. 
    • Another PROS LinkedIn post discusses how frequent travelers are targeted with higher prices.
• The AI pricing vendor Sabre boasted its AirPRiceIQ “leverages the power of advanced machine learning models to optimize airfare offers based on passenger capacity, competition, market conditions, and customer information.” 
  • Sabre showed an example of optimizing price for a price sensitive leisure traveler: “In this shopping session, a traveler’s segment is identified as leisure with prevailing price sensitivity over schedule. We can see all the travel options for a route and the corresponding pre-filed airfares from the Lowfare search. Sabre Mosaic AirPrice IQ dynamically optimizes airfare based on competitors’ itineraries and airfares, value to customer and customer choice modeling. The system recommends offer optimizations with details like potential revenue uplift, probability of conversion, projected profit improvement, minimum itinerary bid price, and more.”