Continental jabs at Delta

[BLUE BAYOU]

Aren't CAL, DAL, and NWAC partners or code sharers? It is amazing how these brothers get along...

Continental Exec: Delta's 'Simplifares Are Simply Stupid'
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By Elizabeth Souder
Of DOW JONES NEWSWIRES

NEW YORK (Dow Jones)--Continental Airlines Inc. (CAL) President Jeff Smisek said the lower fares set by rival Delta Air Lines Inc. (DAL) last month will cost Continental around $100 million in annual revenue.
In January, Delta introduced what it calls Simplifares, a new fare structure that cut the highest fare class in half. Other airlines broadly matched the new fares in order to remain competitive, giving up revenue in the process.
"Simplifares are simply stupid," Smisek said at a JP Morgan conference Thursday. "Our friends in Atlanta kind of finished off the domestic system for us."
Smisek added he had anticipated fares to fall in the next couple of years, and Simplifares accelerated that process.
Smisek wasn't the only executive Thursday to say the new fare will cause revenue to deteriorate. Northwest Airlines Corp. (NWAC) Chief Executive Doug Steenland and AMR Corp. (AMR) Chief Executive Gerard Arpey concurred.
And even Delta executives Thursday said they anticipate a material hit to revenue this year. But Delta Chief Financial Officer Michael Palumbo said the new fares will protect Delta's routes from some low-cost competition.
Continental executives also said they anticipate meeting their goal of cutting labor costs by $500 million by the end of the month.
"We right now are focusing on Feb. 28. We told our employees that now is the best time. Any time past that time, the price goes up because we need $400 million run rate this year," Smisek said. "We are bargaining in good faith with our unions and in return they are bargaining in good faith with us."
Continental executives also said they plan to boost capacity this year 5%, entirely through more international flying.
-By Elizabeth Souder, Dow Jones Newswires; 201-938-4148; [email protected]

(END) Dow Jones Newswires
hers get along...

 

[General Lee]

This is the new reality. We, Delta, have 70% of our domestic flights under LCC competition directly. Continental does not. We have lowered our walk up fares, not the other fares, and we will do better as a result. We have targeted Airtran and Jetblue with these fares, since they charge lower for walk up fares, and this will affect them mostly. If CO and NW (who has hardly any LCC competition except Spirit in DTW and Sun Country in MSP) don't like it, then they should just charge their regular fares and see what happens. We aren't just lowering the fares, we also cut our expenses by $2.3 billion a year, and that along with this fare restructuring will help in the long run.



Bye Bye--General Lee

 

[a320drivr]

General,

I think you took a 1 billion dollar pay cut so your mgmt. could start a fare war.

 

[FLB717]

Per our MGT your simple fares will only affect 3% or so of our RSM. But it will give us a better in for corporate accounts, thank you.

DAL Pilots took cuts to fund a fare war? Yes they did, and money was not well spent. But look for another cut in late 05 on the Court House steps, I hope not but it may happen. And if that does, you will see MGT at AAI take a cut from us, and so the bar would continue to fall, and fall, and fall. And then I would go to CHQ for a par raise.

 

[717pilot]

Lets see....ATL-CLT on May 7th. AIRTRAN $59 coach and $224 Business. On DELTA $69.20 and $448 in First!!! OMG....Simple fares....!! LOL!! CLT here we come!!

 

[General Lee]

Lets see....ATL-CLT on May 7th. AIRTRAN $59 coach and $224 Business. On DELTA $69.20 and $448 in First!!! OMG....Simple fares....!! LOL!! CLT here we come!!

Joe Leonard is scared, why? We can tell because he keeps mouthing off and putting in stupid ads in the ATL paper making fun of Simplfares. The cold hard facts are that Airtran will be impacted by them. I talked to our Marketing folks at our G.O. during my recurrent a couple weeks ago and they stated that many ATL businesses were leaving us initially for Airtran because of the outrageous $1200 one way fares on us, and $500 fares on Airtran, even though they were Skymiles members. Well, looks like we just got a lot of them back, and they will be using us more for walk ups because of the reasonable fares. They also get better frequent flyer rewards with us, that they can use on a host of Skyteam airlines. I don't think you can offer the same, even though you were advertising once that your freq flyer awards could be used on ANY airline.....What a joke. This is aimed right at you----enjoy CLT. Didn't you guys take on USAir at PIT before? They also have lower costs now---and that will be fun for you guys too.


Bye Bye--General Lee

 

[717pilot]

WOW!! Chill man.....just pointing out facts on fares.....and just to make sure I understand right. Your talking about USAIR who has lost what..... MILLIONS?