Al will price our flight tickets: It’s not new but we will hate it

Dynamic pricing has long existed but AI can personalize it deeply

- ALLISON SCHRAGER

am something of an airline reward-points obsessive, or worse.

I lurk on blogs and some more dodgy corners of the internct to learn the latest strategies and promotions. I know thestakes are low, but it’s fun— even the outrage, the latest of which was ignited among the Delta flying community when the American airline announced it was using AI to set prices.

Itsmistake was using the term “dynamic pricing,” which people interpret as personalized pricing, like charging people more depending on why they are flying. Delta isnot doing that (yet), at least not with AL But it is coming, not only for airlines, but also for many consumer businesses. And we will all hate it—but we should all prepare for it.

‘Dynamic pricing,’ like consumption taxes or market-rate-rent, is something only an economist can love. Such pricing usually means a price that changes depending on when you buy—say, when Wendy's wanted to charge less for burgers outside of peak lunch hour. The plan caused such an uproar that it was abandoned. But it would have been better for customers, who could have saved money by eating lunch later (or earlier, ifthey were hungry)