Delta spent July dealing with backlash over what the airline company claims is widespread public confusion over its AI pricing system.

Now, Delta has finally come forward to break down precisely how the AI pricing works to dispute what it claims are "incorrect" characterizations by consumer watchdogs, lawmakers, and media outlets.

In a letter to lawmakers who accused Delta of using AI to spy on customers' personal data in order to "jack up" prices, Delta insisted that "there is no fare product Delta has ever used, is testing, or plans to use that targets customers with individualized prices based on personal data."

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One week after Delta announced it is expanding a test using artificial intelligence to charge different prices based on customers' personal data—which critics fear could end cheap flights forever—Democratic lawmakers have moved to ban what they consider predatory surveillance pricing.

In a press release, Reps. Greg Casar (D-Texas) and Rashida Tlaib (D-Mich.) announced the Stop AI Price Gouging and Wage Fixing Act. The law directly bans companies from using "surveillance-based" price or wage setting to increase their profit margins.

If passed, the law would allow anyone to sue companies found unfairly using AI, lawmakers explained in what's called a "one-sheet." That could mean charging customers higher prices—based on "how desperate a customer is for a product and the maximum amount a customer is willing to pay"—or paying employees lower wages—based on "their financial status, personal associations, and demographics."

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Delta has become the first airline to announce that it is using AI to boost profits by personalizing pricing through a pilot program that for months has caused customers to pay different prices for the same flights based on their data profile.

Critics have warned that this use of AI goes beyond airline practices that charge people who book flights ahead less than people who book flights at the last minute—and could ultimately mean the end of cheap flights across the board if other airlines follow.

On an earnings call last week, Delta Air Lines President Glen William Hauenstein confirmed that seats on about 3 percent of domestic flights were sold using the AI pricing system over the past six months. By the end of the year, Delta's goal is to boost that to 20 percent of tickets.

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