Ed Bastian Says Delta Will Take ‘Nuanced’ Approach to AI Agents, Warns Oil Shock May Not Be ‘Behind Us’

Delta Air Lines Inc. (NYSE:DAL) CEO Ed Bastian has said that the company’s approach to allowing AI agents will differ from its competitors, while outlining the “tremendous opportunity” that AI presents for the airline sector.

Delta’s ‘Nuanced’ Approach to AI Agents

During an interview with Bloomberg on Thursday, Bastian was asked about his approach to AI in the airline sector as well as the returns of investments into developing and implementing the technology.

“I don’t think this is necessarily the right time to be asking where are the returns, but it’s the right question that we have to be mindful of in order to govern how deep into this you want to get,” Bastian said, adding that the sector was still in the “learning” phase.

“We’ve been very cautious,” he said. “We stepped into it. We’ve spent a lot of time internally thinking about how the technology could afford change and there’s tremendous opportunity for change in our industry,” he said.

Bastian then outlined that AI will increase productivity, but warned he was “not certain it’s going to help us grow our business all that much.”

Delta’s Approach to AI Agents

Speaking about AI agents, Bastian said user privacy was of paramount importance for the company. “We’re being careful. We can identify the agents when they approach us. We have the technology and the tools to do that,” he said.

“If they’re there to look for information about airfare for you maybe, you may have sent them looking for us. We’ll respond in kind.” However, Bastian reaffirmed user privacy. “We understand who Lisa is, not who Lisa’s agent is. And we’ll only allow Lisa to do things that we know she wants to do, such as checking in for a flight,” Bastian said.

“We’re a bit more nuanced. We want to learn and understand what they’re [AI agents] doing first. But I can tell you the volumes are relatively low. There’s a lot of news flow about it. But the actual volumes we see are…still quite modest,” he said.

United Airlines Holdings Inc. (NASDAQ:UAL) recently announced it was blocking unauthorized AI agents from booking flights, citing threats to customer privacy and compliance with Federal Aviation Administration (FAA) requirements.

The Iran War and Fuel Shocks

Bastian also defended against high ticket fares, saying that prices during the post-pandemic era were “flat to down” and that there was a bit of a “catch up” for airlines. However, higher fares have not deterred demand. “We haven’t seen the pushback. It’s supply and demand,” Bastian outlined.

When talking about the ongoing Iran war, the CEO said that companies had already increased costs to offset high oil prices. “Our [Delta] profits are down a little bit on a year-over-year basis, but we’ve largely held our margins at this point. And that’s about, I think, all you can do with today’s oil environment,” he said.

However, the CEO warned of a potential hike in oil prices. “I think it’s way too early to declare that the fuel shock is behind us. I mean, there’s a risk it could go higher,” he said.

Elon Musk’s Delta Criticism

The CEO, during the same interview, also defended the Amazon.com Inc. (NASDAQ:AMZN) partnership decision. “We know the Amazon Leo product is going to be a great product" and that it was "coming to the skies here relatively soon, over the next 18 months," he said.

Bastian was fending off criticism from Space Exploration Technologies Corp. (NASDAQ:SPCX) CEO Elon Musk over the airline’s refusal to provide Starlink internet on its flights.

Price Action: DAL shares were up 0.07% to $86.61 during overnight trading on Thursday, according to Benzinga Pro data.

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