Recent examples in the aviation sector have shown that using AI to ‘personalise’ customer interactions can boost revenues, but it’s important to give passengers real, transparent choices, writes Colleen Clark, Director of Client Services at Further.
As the airline industry acclimatises to increased AI across operations, consumers can expect an adjustment period to smooth out glitches, some of which are already surfacing. The reaction to Delta’s plan to expand its AI-driven pricing model underscores the technology’s growing influence over components of the hospitality industry, and the problems that lie ahead. While the potential for innovation is exciting, the shift raises some important questions about how to balance digital progress with customer expectations and apprehensions.
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
Airlines need to proceed cautiously as they continue to explore AI applications, ensuring new features satisfy customers without raising red flags over privacy. Automated decisions aren’t necessarily better, and carriers that overstep in this area could cause customers to feel they’ve lost control of their own travel experience.
AI personalisation is a double-edged sword
Most airlines have plans to integrate AI into a variety of processes and systems, such as pricing models, customer service and flight operations. According to a trends report by SITA, only 3% of airlines have no plans to invest in AI technologies.
Delta’s AI pricing model uses advanced algorithms when generating 3% of fares, creating personalised ticket prices for individual travellers. It’s been successful enough that the carrier plans to use the technology to determine 20% of ticket prices by the end of the year. Though the approach could optimise Delta’s revenue and even enhance affordability for some passengers, it’s also raising concerns among consumers and regulators due to the potential for bias and a lack of transparency.
Customers appreciate specialised buying experiences — 76% express frustration when companies fail to deliver tailored interactions, but they also want fairness and clarity. Failing to provide will erode trust and lead consumers to see AI as intrusive rather than helpful. In addition to viewing the technology as a way to maximise revenue, airlines can and should leverage it to foster loyalty and provide value to passengers.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataSuccessful data activation requires accurate, reliable sources and the right tools
Keeping AI-fueled personalisation and transparency balanced is possible, and airlines are already doing half the required work. Tapping into their massive existing stores of consumer data to create predictive segments can ensure the right offers are delivered at the right times, driving cross-sell and upsell opportunities.
A unified, comprehensive record of a customer’s accurate data across all touchpoints, known as a “golden customer profile,” integrates insights from sales, marketing, customer service, and transactions. This asset is essential for personalising interactions and enables businesses to provide buyers with the products and services that truly meet their needs. It’s a strategy airlines could adopt by activating data from:
- Booking and flight patterns
- Mobile app and website usage
- Loyalty program information
- Demographic and survey metrics
Using the best tools is just as critical as selecting the correct data sources. One option, Customer Data Platforms, eliminates silos, consolidates data, and builds complete, actionable profiles. Predictive segmentation models can further enhance efforts by identifying passenger preferences or trends, allowing airlines to personalise recommendations and promotional offers. However, it’s important to give passengers real, transparent choices and make them fully aware of how much data is being collected and used to shape their experiences.
Consider all angles and consequences before launching AI strategies
On the surface, AI-powered pricing sounds beneficial — airlines can boost revenue, and passengers may enjoy increased value and curated experiences. But, as the reaction to Delta’s pilot program demonstrated, there’s always another side to consider. It’s crucial to assess AI implementation from all angles before rolling out new strategies. Taking these steps can help companies avoid a hard-learned lesson:
- Prioritise transparency: Airlines can educate passengers about how pricing is determined by providing a clear breakdown of factors that influence ticket prices.
- Beware of the perception of exploitation: Use personalisation ethically to ensure it enhances encounters rather than exploits travellers. For example, airlines can offer value-driven upsells like lounge access during delays to build goodwill.
- Anticipate regulatory review: Oversight agencies are increasingly monitoring AI usage in consumer industries. Airlines can adopt compliance frameworks now and set a high standard for fair practices to demonstrate brand responsibility and avoid potential legal challenges.
It’s still early days for AI in the airline industry, but Further thinks its long-term potential is undeniable. Seamless booking experiences and attentive treatment certainly are appealing. And while AI can make it possible by transforming nearly every touchpoint of the customer journey, there’s a long road ahead. Ethical issues, privacy concerns and potential biases in predictive models must first be understood and addressed. Tackling those challenges head-on shows a company’s tech investments aren’t just surface-level innovations, but part of a broader commitment to trust and transparency.
