Delta chief says AI will pay off behind the ticket price

Delta Air Lines Chief Executive Ed Bastian says if the airline could take two, three, or four points off costs over several years by making smarter, better decisions, profit would rise by half. That would move Delta from a 10% margin to a 15% margin, stakes he puts at billions of dollars.

Gary Leff, who writes View from the Wing about airline loyalty and travel, describes Delta's aim as replacing what he calls "slow decisions made by employees" with "constant machine-made decisions." He says the areas include ticket prices, seat upgrades, staffing after disruptions, plane upkeep, fuel buying, and office tasks.

Bastian says the opportunity is in making better revenue decisions on how the airline manages its different buckets of seats for sale. That bucket management is part of the broader AI pricing approach, which adjusts how many seats are offered at each fare level.

Bastian said, "I think the issues of trust and governance are also really important, and that’s why I never refer to AI as artificial. I always call it augmented intelligence. It’s going to make our people smarter and better."

Leff says Delta may be overestimating the lasting benefit. He argues other airlines will adopt similar tools and compete away the advantage, pointing to United, which cut 4% of management staff last year and expected to do so again this year.

Delta is working with startup Fetcherr on AI pricing, first on about 3% of its domestic network. Senators Ruben Gallego, Richard Blumenthal, and Mark Warner questioned whether it uses browsing history or personal data and warned of fares set to each traveler's personal pain point. Delta said in an official response: "There is no fare product Delta has ever used, is testing or plans to use that targets customers with individualized prices based on personal data."