Oh, this is why I love Mifnet. And why I post some of the things I do. I want to learn. So, thank you, Hubert. Cheers -- Kathryn
On Fri, Sep 19, 2025 at 3:03 AM Hubert Horan via Mifnet < mifnet@lists.mifnet.com> wrote: > Ronell and Creedy had mentioned the recent white paper on the > Delta/Fletcherr “AI pricing” approach. It was authored by Courtney Miller > of a consultancy called Visual Approach Analytics. > https://app.visualapproach.io/research/pricing-at-the-speed-of-data-the-new-airline-ai-arms-race > > TL;DR—it is a useless load of hot air > > 1. Delta’s 2024 passenger revenue was $52 billion. Miller absurdly claims > that the Delta/Fletcherr “AI pricing” approach could increase revenue by > 10% (“and could be higher than 10%”). Such $5+ billion gains would > obviously dwarf every financial improvement in the history of aviation. > Miller provides no concrete evidence/examples of how this “AI pricing” > approach could possibly produce improvements anywhere close to this > magnitude. > > 2. Miller describes the Delta/Fletcherr “AI pricing” approach as “a > revolution in ticket pricing” but never defines (much less explains) any > algorithmic breakthrough versus traditional airline revenue management. > Miller claims that Fletcherr “offers an impressively detailed look into > their methodology” at their website and is astounded that only 400 people > downloaded that information. I was one of those 400 people, and as I > pointed out back in July those documents presented nothing close to a > coherent methodology and seemed largely based on vague notions that > airlines were “outdated” and “undisrupted” and had seen few recent > technological advances and that hedge fund practices would readily apply to > airlines and help lead them out of the darkness. > > 3. Miller never explains what specific pricing/yield management decisions > the Delta/Fletcherr “AI pricing” approach is designed to support, what > decisions are currently made badly, and how the new approach would make > better ones. Is it strictly supporting short-term YM (at what point should > discount buckets be shut off; what response should be made to competitor > price changes) or is it supporting longer term competitive/capacity > planning decisions (improving market share on key routes/hubs; would > capacity/schedule changes be more profitable than pricing changes)? He > completely ignores the problem that “AI” tools don’t make decisions and > can’t support decisions that aren’t following patterns thoroughly > documented in the training data. > > 4. After initially pounding the pricing revolution drum, Miller begins to > backtrack. Perhaps longstanding RM practices aren’t all that bad, and he > acknowledges several past failed efforts to demonstrate structural > shortcomings. Nonetheless he insists the Delta/Fletcherr “AI pricing” > approach will improve “implementation” and would support faster decision > making by “coalesce[ing] all an airline’s data into one data warehouse.” > Miller presents no evidence that Delta or other airlines have poor data > warehousing practices today and makes no attempt to explain the poor > “implementation” that badly suboptimizes revenue. He can’t cite any input > data that airlines haven’t been using for decades. Surely any airline RM > system can be improved but Miller’s claim that “Fletcherr and Delta have > begun to automate pricing” suggests profound ignorance of current levels of > automation. > > 5. The major issue, raised by my original posts and numerous outside > articles, is whether the Delta/Fletcherr “AI pricing” approach is just > trying to marginally improve traditional RM, or whether it’s part of a > larger effort to introduce first-degree price discrimination in the hope of > charging higher fares to people who may be willing to pay more than others. > Miller makes insincere efforts to discredit critics of extreme personalized > pricing, claiming without citations that they said Delta was planning to > collect information about personal checking accounts. Miller > parenthetically admits that the Delta approach might use personal > information including historical spend and IP addresses while evading the > questions of whether first-degree price discrimination is a Delta/Fletcherr > objective, or whether gains from this are included in the 10% revenue > improvement he claims is possible. > > Miller’s paper provides absolutely no value to any objective outsider > trying to figure out what algorithmic/RM process improvements Delta is > hoping to achieve, or whether generative tools could significantly improve > RM. As to the more important “are airlines really trying to move to > first-degree price discrimination” question I would refer to Senator > Gallego’s comments after Delta’s Glenn Hauenstein testified about their > plans—either Delta is lying to its investors (about the huge potential > returns from the Fletcherr AI project) or they are lying to us (when they > insist they have no intention to impose personalized pricing). > > > > -------------------------------------------------------------------------- > Revised: 20250507 > > You are receiving The Mifnet because you requested to join this list. > > The Mifnet is largely a labor of love, however the infrastructure isn't > exactly cost-free. If you'd care to make a small contribution to the > effort, please know that it would be greatly appreciated: > https://wardell.us/url/mifbit > > All posts sent to the list should abide by these policies: > > 1) List members acknowledge that participation in Mifnet is a > privilege--not a right. > 2) Posts are always off the record, absent specific permission from the > author. > 3) The tone of discussions is collegial. > 4) Posts are expected to be in reasonably good taste. > 5) We discuss ideas and not personalities, and we don't speak ill of other > Mifnet members. > > * The Mifnet WEB SITE is: > https://www.mifnet.com/ > > * To UNSUBSCRIBE from this list at any time please visit: > https://lists.mifnet.com/ > OR: SEND THIS MESSAGE via email: > mifnet-requ...@lists.mifnet.com?subject=leave > > * Send Mifnet mailing list POSTS/SUBMISSIONS to: > mifnet@lists.mifnet.com > > * You may reach the person managing The Mifnet at: > mifnet-ow...@lists.mifnet.com > > * Please consider the DIGEST version of The Mifnet, which consolidates all > list traffic into 1-3 > messages daily. See instructions at: > https://lists.mifnet.com/ > > * Manage your personal Mifnet SUBSCRIPTION at: > https://lists.mifnet.com/ > > * For a list of all available Mifnet commands, SEND THIS MESSAGE via email: > mifnet-requ...@lists.mifnet.com?subject=help > > * View The Mifnet LIST POLICIES and PRIVACY POLICY at: > https://mifnet.com/index.php/policies > > * View instructions for Mifnet DELIVERY PROBLEMS at: > https://mifnet.com/index.php/delivery-problems > > * View The Mifnet LIST ARCHIVE at: > https://lists.mifnet.com/hyperkitty/list/mifnet@lists.mifnet.com/ > -- Kathryn Creedy PHONE # 321 405 4395 US-Eastern Time Zone *Twitter*: @kcreedy *Visit me on LinkedIn*
-------------------------------------------------------------------------- Revised: 20250507 You are receiving The Mifnet because you requested to join this list. The Mifnet is largely a labor of love, however the infrastructure isn't exactly cost-free. If you'd care to make a small contribution to the effort, please know that it would be greatly appreciated: https://wardell.us/url/mifbit All posts sent to the list should abide by these policies: 1) List members acknowledge that participation in Mifnet is a privilege--not a right. 2) Posts are always off the record, absent specific permission from the author. 3) The tone of discussions is collegial. 4) Posts are expected to be in reasonably good taste. 5) We discuss ideas and not personalities, and we don't speak ill of other Mifnet members. * The Mifnet WEB SITE is: https://www.mifnet.com/ * To UNSUBSCRIBE from this list at any time please visit: https://lists.mifnet.com/ OR: SEND THIS MESSAGE via email: mifnet-requ...@lists.mifnet.com?subject=leave * Send Mifnet mailing list POSTS/SUBMISSIONS to: mifnet@lists.mifnet.com * You may reach the person managing The Mifnet at: mifnet-ow...@lists.mifnet.com * Please consider the DIGEST version of The Mifnet, which consolidates all list traffic into 1-3 messages daily. See instructions at: https://lists.mifnet.com/ * Manage your personal Mifnet SUBSCRIPTION at: https://lists.mifnet.com/ * For a list of all available Mifnet commands, SEND THIS MESSAGE via email: mifnet-requ...@lists.mifnet.com?subject=help * View The Mifnet LIST POLICIES and PRIVACY POLICY at: https://mifnet.com/index.php/policies * View instructions for Mifnet DELIVERY PROBLEMS at: https://mifnet.com/index.php/delivery-problems * View The Mifnet LIST ARCHIVE at: https://lists.mifnet.com/hyperkitty/list/mifnet@lists.mifnet.com/
