Delta Air Lines has been leveraging an artificial intelligence tool by the Israeli company Fetcherr for pricing tickets on a portion of its domestic flights. It currently uses the system on 3% of its flights and aims to increase its application to 20% by the end of the year. Company President Glen Hauenstein revealed the information during an earnings call, explaining that the technology is designed to determine the maximum amount a traveler is willing to pay. The more input the system receives, the smarter it becomes.
Fetcherr serves as a sort of super analyst that is continuously learning and adapting. This places it at the heart of Delta's reengineering of its pricing mechanism. Early results have shown remarkably positive unit revenues with Fetcherr's product demonstrating a potential to boost revenue by approximately 9%, as reported by travel site One Mile at a Time.
Delta's ultimate goal is for Fetcherr to not only set ticket prices but to also determine seat availability at those prices, forming what Hauenstein referred to as an "offer management" system. He envisions a system where the individual consumer is presented with a price for a particular flight at a specific time, rather than having static price grids. Despite Delta's stock experiencing some fluctuations, the company stands to redefine airline pricing with this innovative approach.