American Airlines’ top executive had strong words this summer about a competitor using artificial intelligence to help set flight prices. Now, the airline is looking at ways to use AI itself — but said it’s just hoping to save time, not let AI bots dictate the price customers pay.
Speaking Thursday at an industry conference, Steve Johnson, American’s vice chair and chief strategy officer, rattled off several ways the airline is thinking about using AI. One has to do with the fares customers see when they go to book a flight.
“We file an uncountable number of fares, three times a day, all of which we have to make competitive in a super dynamic environment. AI’s going to help us do that,” Johnson said at the Morgan Stanley Laguna Conference in California.
Those comments came less than two months after American CEO Robert Isom appeared to sharply criticize Delta Air Lines for its AI tactics.
In July, the Atlanta-based carrier told investors it had begun using AI to help with pricing about 3% of its domestic flights.
There was swift backlash, both from lawmakers, who demanded to know whether Delta was using personal data to target consumers with tailored prices (which Delta later denied), and from Isom himself.
“I don’t think it’s appropriate,” Isom said on American’s July 24 earnings call. “This is not about bait and switch. This is not about tricking. And certainly, from American, it’s not something we will do.”
Yet, American has since acknowledged it’s exploring AI tools to help with its revenue management — the behind-the-scenes systems that help airlines decide how much to charge for tickets and how to fill planes profitably.
American tells TPG that any AI tools it might consider for future use are about saving time, and helping the carrier automate the filing of millions of fares each day across its network.
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The airline maintained it would never personalize fares based on an individual customer’s data, consistent with Isom’s comments in July.
That explanation satisfied longtime industry analyst Henry Harteveldt, who has previously raised concerns about airlines’ use of AI with fares.
“What AI will do is allow airlines to be more responsive to market changes and be more competitive as a result,” said Harteveldt, president of Atmosphere Research Group. “The way I interpret this is that American is going to use AI to, frankly, be more competitive with other airlines, especially airlines that may be charging less.”
To be clear, Delta — despite lawmaker scrutiny — has also said that it’s only using AI tools to aid in its own airfare decision-making based on publicly available data and industry dynamics. As part of its AI pilot program, Delta is partnering with third-party Israeli tech firm Fetcherr.
American, for its part, is also using or exploring AI in other areas. Johnson last week said the carrier sees AI tech as a way to better help customers rebook after their flight is delayed or canceled. The carrier is already using generative tools to help it get operations back on track when bad weather or other major disruptions hit.
“It’s a business that is enormously complicated,” Johnson said Thursday. “And the ability to have automation that can, in effect, produce answers more comprehensively and faster is always going to be valuable for us.”
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