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http://news.cincinnati.com/article/20090127/BIZ01/301270026/1076/rss01
Delta Air Lines’ top executive said today that a new fare structure is being planned for the Cincinnati/Northern Kentucky International Airport.
OAS_AD('articleflex_1');“Fairly soon, we are going to be rolling out a new fare structure in Cincinnati,” said Delta chief executive officer Richard Anderson. “Between our new network strategy there and a new fare strategy, we should see some nice improvement in Cincinnati.”
Anderson disclosed the plan during a conference call held with reporters and analysts to discuss the company’s fourth-quarter financial results. He was responding to questions about previous statements that Cincinnati and Detroit were the airline’s two poorest performing hubs.
Anderson did not provide any further details during the call, including when the new structure would be implemented or how exactly it would impact local fares. Airline officials declined to discuss his statements any further, citing legal concerns about possibly disclosing future pricing plans.
Airport officials also had not heard of any plans to change local fares as of this morning.
Cincinnati has long had the most expensive fares in the nation, mainly due to Delta’s market dominance here. The carrier controls 91 percent of the market by passengers, but Delta has cut 33 percent of its overall flying here in the last 12 months.
In fact, the last time the local airport was not the most expensive was the last time Delta changed its local fare structure under a program called SimpliFares that launched here in August 2004 and nationally in January 2005.
The system included fewer fare types, a cap on fares overall, and lower fares overall. But it was abandoned as the struggling carrier tried unsuccessfully to stave off bankruptcy, which it entered in the fall of 2005. The restructured airline emerged from bankruptcy in April 2007.
The fare situation has angered many in the area, and raised enough concern among local business leaders that the airport has teamed with area chambers of commerce and business development groups to sponsor an online travel survey. Launched earlier this month, the survey has already gotten nearly 12,000 responses, and the last day to participate is Wednesday at www.cvgsurvey.com.
As for its financial results, Delta reported a fourth-quarter loss of $1.4 billion, including a one-time special charge of $800 million in employee costs associated with the October merger with Northwest Airlines. The fourth-quarter results also include those of Northwest from Oct. 30 forward.
The airline also lost $8.9 billion for all 2008 as a result of special charges equated with the merger and last summer’s fuel crisis.
Airline officials said that without fuel hedge problems, Delta would have been profitable in the fourth quarter and that the airline is expected to be profitable in 2009. Delta in essence is paying too much for fuel under contracts that have higher prices than what the current open market is charging. Those contracts will expire early this year.
The airline employs nearly 7,000 locally between the main operation and that of Erlanger-based regional subsidiary Comair. But the latter’s Concourse C also closed at the beginning of the year, and Delta officials said that move cost $18 million in a one-time charge during the call.
The company has warned of continued downsizing as the economy continues to worsen. Delta already is planning on shedding 2,000 jobs through an early retirement program, and said it was planning on cutting 6-8 percent of its total capacity through this year.
The loss equated into $2.11 per share, or a loss of 50 cents per share excluding special items. Analysts and experts had expected a loss of about 33 cents a share.
The news followed other losses by major U.S. airlines this month, including American Airlines and United Airlines.
The company’s stock fell to $8.18 in midday trading, down $1.75 on the day. The stock had climbed significantly to above $10 in the fourth quarter due to lower fuel prices, although the airline is losing some money on fuel as it continues to pay higher contract prices due to previous hedges.
The company had lost $70 million in the fourth quarter of 2007 and $1.6 billion in all of that year, but that was prior to this fall’s merger.
Delta Air Lines’ top executive said today that a new fare structure is being planned for the Cincinnati/Northern Kentucky International Airport.
OAS_AD('articleflex_1');“Fairly soon, we are going to be rolling out a new fare structure in Cincinnati,” said Delta chief executive officer Richard Anderson. “Between our new network strategy there and a new fare strategy, we should see some nice improvement in Cincinnati.”
Anderson disclosed the plan during a conference call held with reporters and analysts to discuss the company’s fourth-quarter financial results. He was responding to questions about previous statements that Cincinnati and Detroit were the airline’s two poorest performing hubs.
Anderson did not provide any further details during the call, including when the new structure would be implemented or how exactly it would impact local fares. Airline officials declined to discuss his statements any further, citing legal concerns about possibly disclosing future pricing plans.
Airport officials also had not heard of any plans to change local fares as of this morning.
Cincinnati has long had the most expensive fares in the nation, mainly due to Delta’s market dominance here. The carrier controls 91 percent of the market by passengers, but Delta has cut 33 percent of its overall flying here in the last 12 months.
In fact, the last time the local airport was not the most expensive was the last time Delta changed its local fare structure under a program called SimpliFares that launched here in August 2004 and nationally in January 2005.
The system included fewer fare types, a cap on fares overall, and lower fares overall. But it was abandoned as the struggling carrier tried unsuccessfully to stave off bankruptcy, which it entered in the fall of 2005. The restructured airline emerged from bankruptcy in April 2007.
The fare situation has angered many in the area, and raised enough concern among local business leaders that the airport has teamed with area chambers of commerce and business development groups to sponsor an online travel survey. Launched earlier this month, the survey has already gotten nearly 12,000 responses, and the last day to participate is Wednesday at www.cvgsurvey.com.
As for its financial results, Delta reported a fourth-quarter loss of $1.4 billion, including a one-time special charge of $800 million in employee costs associated with the October merger with Northwest Airlines. The fourth-quarter results also include those of Northwest from Oct. 30 forward.
The airline also lost $8.9 billion for all 2008 as a result of special charges equated with the merger and last summer’s fuel crisis.
Airline officials said that without fuel hedge problems, Delta would have been profitable in the fourth quarter and that the airline is expected to be profitable in 2009. Delta in essence is paying too much for fuel under contracts that have higher prices than what the current open market is charging. Those contracts will expire early this year.
The airline employs nearly 7,000 locally between the main operation and that of Erlanger-based regional subsidiary Comair. But the latter’s Concourse C also closed at the beginning of the year, and Delta officials said that move cost $18 million in a one-time charge during the call.
The company has warned of continued downsizing as the economy continues to worsen. Delta already is planning on shedding 2,000 jobs through an early retirement program, and said it was planning on cutting 6-8 percent of its total capacity through this year.
The loss equated into $2.11 per share, or a loss of 50 cents per share excluding special items. Analysts and experts had expected a loss of about 33 cents a share.
The news followed other losses by major U.S. airlines this month, including American Airlines and United Airlines.
The company’s stock fell to $8.18 in midday trading, down $1.75 on the day. The stock had climbed significantly to above $10 in the fourth quarter due to lower fuel prices, although the airline is losing some money on fuel as it continues to pay higher contract prices due to previous hedges.
The company had lost $70 million in the fourth quarter of 2007 and $1.6 billion in all of that year, but that was prior to this fall’s merger.
