Delta Engineered a Pricing System That Sorts You by Economic Value
Delta Air Lines is embarking on a bold experiment in airfare pricing. At a recent investor presentation, the airline announced plans to expand its use of artificial intelligence for setting ticket prices to cover 20% of its U.S. domestic flights by the end of 2025. This move comes after limited tests last year (affecting ~1% of fares) and a current rollout on about 3% of tickets, with early results described as "amazingly favorable" for revenue. Delta is partnering with an Israeli pricing-technology startup called Fetcherr to power this system. According to Delta's president Glen Hauenstein, the vision is to abandon static pricing entirely and have AI generate a custom fare "on that flight, on that time, to you, the individual". In other words, the airline's AI will act as a 24/7 "super analyst," crunching data in real time to adjust fares for each flight and potentially for each customer.
Airlines have practiced dynamic pricing for decades as a core part of "yield management." Since the 1980s, carriers have used computer models to continually adjust fares based on timing, demand, competition, and other market factors. If a flight is filling up, prices go up; if sales are slow, prices go down. Crucially, traditional dynamic pricing does not differentiate between individual customers - at any given moment, every customer faces the same price for a seat in a particular fare class.
