Delta to Slash Fares

[atrdriver]

If they leave fares high, customers will go elsewhere and load factors will go down even more...they will lose EVEN MORE money

DAL isn't having too many problems with "high" fares. If they had high fares they would be making money. I don't know what the exact numbers are, but I would think that the load factors are probably in the mid 70's to mid 80's, and that is a pretty good number. It's hard to non-rev anymore simply because the planes are always full.

 

[Slim]

Twenty four years in this industry and pricing is a bigger mystery than ever before!

This move is not surprising heading into the weakest travel quarter of the year. The last price I saw today, for crude oil, was below $42/barrell. Hopefully, that will help soon.

The CVG fare experiment seems to stem the flow of orginating traffic from the CVG area to DAY, CMH, IND, LEX, SDF. A lot of that traffic went to DL, which charged lower fares from those cities to one's destination. The originating CVG traffic is increasing. I don't believe the LCCs got as much of that traffic as many seem to think.

Fly safe!

 

[MedFlyer]

1. Delta leaks some info on this story

2. News media goes with "Delta to slash fares"

3. In reality some fares will increase and some will decrease. Less bottom dollar fares and more mid range fares, with the highest fares comming down.

4. When full story comes out, the "big" media outlets that reported "Delta to slash fares" (who are running the story every 15 minutes) will resist reporting the details (so they don't look like they got the story wrong). Aviation writers will report the details, but the "masses" will remember what they saw on CNN, etc.

5. Delta will announce the restructured fares and schedules, and most will only have time to remember "Delta to slash fares".

6. Good short term PR

7. 695 Delta pilots will still be on furlough, so why am I wasting time writing this.

We have a winner. Look at the PR DL is getting from this event. DL was featured on the NBC Nightly News and the report was actually positive (something rare when it comes to the media and airlines).

Unfortunately, you're right that in the short term this move will do little to help the furloughees. But if this fare restructuring is successful, it will eventually stimulate mainline growth....a good thing for the furloughees.

 

[sleepy]

Just what the airlines need right now, a fare war. How will DAL fight a fare war against bankrupt carriers and LCCs?

 

[Immelman]

Based upon my experience as an airline customer I think this was a good move. Here's why:

For business travel:
When I need to travel for business we often have to buy the tickets a day or two in advance. GUESS who gets the business for a typical west-coast flight (the type I most often have to go on)? SWA. Why? their last-minute fares, while higher, are within the realm of reason. Now I know that the legacy's typically match on identical routes but SWA still usually wins out because there is less of the fare-class-BS that the legacy's exhibit, usually resulting in a lower fare.

For international travel we book in advance, but seldom fly US-based carriers because the service is poor compared to the alternatives (Virgin, British, Cathay, etc.) and there is no comfortable product offered for a reasonable price. Example: my company will pay $2k for a virgin-atlantic prem-economy seat but not $6-10K for an american business class seat).

The "extortion" fares legacy carriers have previously relied upon just won't cut it any more for business travel. I don't get to pick the airline on business trips; the company does.

Now on the flip side - leisture travel:
You guys talk a lot about how SWA/JB are killing everything but it isn't entirely trye. Its been my experience that egacy's are slashing each other's throats WITHOUT the help of JB or SWA... example: recently I went SFO/JFK, for vacation, booked months in advance. Typical budget leisure traveller. JBLU offered the trip (SJC/JFK actually) for something like $330-350. Not bad. Guess what the least expensive fare was? A one way out on UA and back on AA. Total cost: $220 with tax (so more like $90 each way to the airlines?). Booked on the American Airlines website no less! I am quite sure both carriers lost significant money on me.

Now how the heck did that happen? You can't blame the LCCs.. not many airlines offer non-stop JFK/SFO service but AA/UA. None of the other carriers had fares anywhere close, even with stop-overs. They're cutting each other's throats. That's where your pay cuts and bennies are going.

When are the legacy carriers going to wake up and realize
(1) you can't screw passengers with extortion fares for business travel. The business goes elsewhere.

(2) charging a reasonable fare can actually work for both leisure and business travelers -- reasonable meaning competitive with LCCs, maybe even a bit more if your amenities dictate it (food, service, comfort, miles). Guess what? Jblue is the best choice for someone like me if I'm going to the east coast; AA is removing the "more room" and will soon have no food on trans-cons in economy. They won't get my business on the route any more even if they're a bit LESS costly than JBLU. Why? I'm 6' 3" and the extra 3" JB offers is reason enough to go with them.

Delta appears to have woken up to how to get the business travelers back. Hope it works!

PS: As I'm finishing writing this I am listening to NPR and they just started a segment on the Delta fare-simplification. Go figure.