Delta Airlines is making headlines because of its AI-driven pricing systems.

There's a lot I wanted to say on the topic, but my colleague Dr. Amarita Natt said it much better:

Dynamic pricing models and pricing algorithms that use your web activity to dynamically adjust prices are not at all new.

They've been live in various forms since at least the early 2000s, and AI isn't changing how they fundamentally function. They're a great example of price discrimination, which is a really aggravating phenomenon for consumers - who always feel ripped off - but isn't illegal.

Don't get me wrong: pricing algorithms can definitely go wrong and can be used to collude both intentionally and inadvertently, but they've been in widespread use for awhile and I don't think that will stop.

She's spot-on. Airlines are the textbook example of price discrimination!

Remember the old "Saturday night stay" rule? That was an early tool to get business and leisure travelers to self-identify. Since then they've developed larger, more computerized systems to -ahem- find the "best" price for each passenger.

I understand why people are upset. Dynamic pricing systems often hit on our sense of fairness -- "why do I have to pay more than the other person?" or "why are you charging me more because I'm in a tight spot?" -- but in this case, it's not about AI. It's about airlines using every tool at their disposal to maximize revenue. AI is just the newest tool in that toolbox.

(As a wise person keeps reminding me: adding "AI" to a long-standing practice doesn't make it new. And in this case, it doesn't make the practice predatory. It was arguably predatory before. But it's still legal, so ...)