American Airlines CEO Slams Delta’s AI Pricing Tactics

FORT WORTH- American Airlines (AA) CEO Robert Isom strongly criticized Delta Air Lines (DL) for its use of artificial intelligence (AI) in fare pricing, labeling it a breach of customer trust. The remarks came during American’s second-quarter earnings call, where Isom pledged that American Airlines would not adopt similar AI-driven pricing tactics.

Delta’s AI-based pricing model, used at Hartsfield-Jackson Atlanta International Airport (ATL), currently influences 3% of fares with a target of 20% by year’s end.

American Airlines, based out of Dallas/Fort Worth International Airport (DFW), is taking a different route, focusing on operational improvements and transparency.

Photo: Clément Alloing

American Airlines Rejects AI Tactics

During the final and most contentious question of American Airlines’ Q2 2025 earnings call, Robert Isom was asked whether the airline plans to implement artificial intelligence in pricing strategies, similar to what a competitor (widely understood to be Delta Air Lines) has been piloting.

Isom responded sharply, saying, “This is not about bait and switch. This is not about tricking.” He continued, “Others who talk about using AI in that way, I don’t think it’s appropriate. And certainly, at American, it’s not something we will do.”

According to View From the Wing, Isom made it clear that American Airlines will apply AI to enhance internal operations and improve customer experience, not to manipulate pricing.

Instead of deploying AI to dynamically adjust fares based on real-time demand cues, American plans to use machine learning tools like HEAT (an internal system) to optimize operations during disruptions and speed up recovery.

The airline emphasized that AI investments will support employees and provide passengers with more visibility into amenities and quicker solutions during travel issues.

Photo: Clément Alloing

Financial Performance

American Airlines reported a net income of $599 million for Q2 2025, exceeding expectations but trailing competitors in profit margins. Despite the earnings beat, shares declined due to underwhelming forward guidance.

A major driver of American’s profitability remains its AAdvantage loyalty program, particularly the success of its co-branded credit card partnerships.

Spending on AAdvantage credit cards rose 6% YoY. In addition, American raised $1 billion backed by future AAdvantage program revenues, highlighting the program’s critical role in the airline’s financial strategy.

This success stands in contrast to the airline’s core transportation metrics, which show that operating costs per available seat mile (17.08 cents) still exceed passenger revenue per seat mile (16.90 cents).

Photo: Aero Icarus | Flickr

Business Travel Recovery

American continues to aggressively rebuild its managed business travel segment, which is up 10% YoY. Through targeted discounts and incentives, the company aims to return to its historical share of indirect bookings by the end of 2025.

The airline also reported progress in its cost-saving initiatives. It expects to achieve $750 million in savings by the end of the year through reengineering efforts, including shifting certain aircraft maintenance tasks to later in the year.

These efficiencies are essential as American attempts to close the margin gap with competitors like United and Delta.

Photo: Aero Icarus | Flickr

Strategic Responses

When asked about United Airlines (UA) CEO Scott Kirby’s remarks that some carriers are flying a significant percentage of unprofitable routes, Isom sidestepped direct confirmation but emphasized that American does not run its operations based on competitor opinions.

He defended American’s strategy, noting its stronger domestic focus, a sector that has recently underperformed, and the potential for international expansion to help bridge profitability gaps.

However, analysts remain skeptical, suggesting the airline’s margin disadvantage may persist in the near term.

Regarding the loss of JetBlue as a Northeast partner (following the DOJ’s successful challenge of their alliance), Isom stated that American still plans to expand its New York operations by using larger aircraft, despite limited slot availability at airports like JFK and LaGuardia.

Stay tuned with us. Further, follow us on social media for the latest updates.

Join us on Telegram Group for the Latest Aviation Updates. Subsequently, follow us on Google News

The post American Airlines CEO Slams Delta’s AI Pricing Tactics appeared first on Aviation A2Z.