Airlines are increasingly turning to artificial intelligence to set ticket prices in real time, a shift that is making it harder for travelers to find cheap fares on popular routes. Unlike traditional pricing models that relied on fixed rules and manual adjustments, AI-driven systems analyze a wide range of data—including booking demand, seat availability, fuel costs, cancellations, and travel dates—to continuously update fares.
AI Replaces Traditional Pricing Models
Historically, airlines used analysts and predetermined formulas to manage pricing. A carrier might raise fares after selling a certain percentage of seats or lower them when bookings slowed. Today, AI systems can process dozens of variables simultaneously and adjust prices throughout the day. Carriers such as Delta Air Lines and Virgin Atlantic have adopted AI-based pricing tools, according to Bloomberg. These systems allow airlines to respond quickly to rising demand and also to drop fares on flights with many empty seats.
“Consumers should expect that airlines will be smarter about their pricing,” Bryan Terry of Alton Aviation Consultancy told Bloomberg. He added that airlines would “exploit that capability to raise fares where possible and cut prices where they have room to stimulate demand.”
Impact on Fare Availability
AI pricing narrows the window for unusually low fares on busy routes. The models compare current demand with historical booking patterns and market data, then set prices close to what airlines believe passengers are willing to pay. On routes with weaker demand, the same technology can produce cheaper tickets as airlines reduce fares to attract bookings and fill seats. Thus, AI does not universally raise prices but reduces bargain opportunities during peak travel periods.
Israeli technology company Fetcherr supplies AI pricing software to nearly a dozen carriers, including WestJet and Azul. Co-founder Uri Yerushalmi said its models review a wide range of information before setting fares. “Our models analyze dozens if not hundreds of classes of variables to come up with fares,” he told Bloomberg. “You can only now do that because of AI.” Fetcherr reports that its software primarily boosts airline revenue by helping carriers fill seats. During recent Middle East travel disruptions, the platform adjusted fares in response to oil prices, cancellations, and shifting demand.
Regulatory Scrutiny of Personalized Pricing
Airlines also use AI after tickets are booked. Volantio, whose software is used by Japan Airlines, identifies travelers who may accept vouchers to move from full flights, freeing seats that can be sold at higher last-minute fares. However, consumer groups and lawmakers have raised concerns about personalized or “surveillance pricing,” which could charge different fares for the same seat based on personal data such as browsing activity or income estimates.
The US Federal Trade Commission has examined whether airlines use individual customer data to increase prices. Maryland has passed legislation targeting predatory pricing practices, and other regulators are reviewing similar issues. Airlines and technology providers maintain that their current systems do not use personal information to set fares. Delta has denied using personal data for ticket pricing, Fetcherr says it relies on aggregated market information, and Volantio states its passenger offers are not personalized.
As AI continues to reshape airline pricing, travelers may find fewer last-minute deals on popular routes, while regulators work to ensure that new technologies do not lead to unfair or discriminatory pricing.
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