AI Could Save Time for American Airlines Fares, Says Company

American Airlines Explores AI for Operational Efficiency, Not Price Setting

American Airlines has been vocal about its stance on artificial intelligence (AI) in the airline industry. Recently, the airline’s top executives have highlighted how they are considering the use of AI to streamline operations and improve efficiency, but not to set prices for customers. This comes after a period of public criticism of a competitor's AI practices.

At an industry conference in California, Steve Johnson, American's vice chair and chief strategy officer, outlined several potential applications of AI within the airline. One of the key areas he mentioned was the fares that customers see when booking flights. Johnson emphasized the complexity of managing these fares, noting that the airline files an uncountable number of fares three times a day, all while ensuring competitiveness in a rapidly changing market.

"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 during the Morgan Stanley Laguna Conference.

This statement followed comments from American CEO Robert Isom, who had previously criticized Delta Air Lines for using AI in pricing strategies. In July, Delta revealed it had started using AI to assist with pricing on about 3% of its domestic flights. The move sparked backlash from lawmakers concerned about the use of personal data for tailored pricing, which Delta later denied. Isom expressed his disapproval of such tactics, stating that American would not engage in similar practices.

Despite this, American has since acknowledged exploring AI tools for revenue management. The airline emphasized that any AI implementation would be aimed at saving time and automating the filing of millions of fares across its network. American also reiterated that it would not personalize fares based on individual customer data, aligning with Isom's earlier statements.

Industry analyst Henry Harteveldt, president of Atmosphere Research Group, supported American's approach. He noted that AI could allow airlines to respond more quickly to market changes and remain competitive. "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," Harteveldt said.

Delta, despite facing scrutiny, has also stated that its use of AI is limited to aiding airfare decision-making based on publicly available data and industry dynamics. As part of its AI pilot program, Delta is partnering with a third-party Israeli tech firm called Fetcherr.

Beyond fare management, American is also exploring AI in other operational areas. Johnson mentioned that the airline sees AI as a tool to help customers rebook flights after delays or cancellations. The carrier is already using generative tools to manage disruptions caused by bad weather or other major issues.

"It's a business that is enormously complicated," Johnson said. "And the ability to have automation that can, in effect, produce answers more comprehensively and faster is always going to be valuable for us."

As the airline industry continues to evolve, the integration of AI offers both opportunities and challenges. While American remains cautious about price setting, the focus on operational efficiency and customer service highlights the potential benefits of AI in the aviation sector.