Metropolis Reality Forums - Airfare Price Slashing

Sponsored by: The Fans!

Welcome, Guest. Please Login or Register.
Nov 25^th, 2024, 5:50pm

Upcoming Premiere Dates:
Survivor 23, Season premiere
Thursday, September 14 (8:00-9:30 PM, ET/PT) on CBS

Metropolis Reality Forums Ť Airfare Price Slashing ť

   Metropolis Reality Forums
   Off-Topic Forums
   In the News (Moderators: lakelady, yesteach, MediaScribe, Bumper, Isle_be_back)
   Airfare Price Slashing

Previous topic | New Topic | Next topic »

Pages: 1

Add Poll

Notify of replies

Send Topic

Author

Topic: Airfare Price Slashing (Read 117 times)

Rhune
ForumsNet Administrator

Gender:

Posts: 292

Airfare Price Slashing
« on: Jan 6^th, 2005, 4:26pm »

Quote

Modify

Airlines rush to match Delta fare cuts
http://money.cnn.com/2005/01/06/news/fortune500/airfares/index.htm?cnn=y es

American Air, Continental, United, Northwest slash most expensive airfares, not to be outdone.
January 6, 2005: 4:40 PM EST

NEW YORK (CNN/Money) - Several major airlines slashed fares Thursday, matching Delta's decision to cut its most expensive fares by as much as 50 percent.

The move by Delta had been expected to spark a fare war, which some airline executives and analysts said could spell more trouble for an already troubled industry.

American Airlines, owned by AMR Corp., broadly matched Delta's new fare structure, reducing its most expensive fares and lowering fares for last-minute travel between thousands of destinations, the nation's No. 1 carrier said in a statement.

The carrier also eliminated Saturday-night stay requirements on most flights, the statement said. The new fares apply to flights operated by American Airlines, American Eagle and American Connection.

The move places AA alongside Continental, United, Northwest Airlines and US Airways, all of which moved to match Delta's price cuts, according to Internet travel site Bestfares.com.

"As we forecasted yesterday, it took less than 24 hours for the five remaining legacy carriers to match Delta's moves," Bestfares.com chief executive Tom Parsons said in a statement.

Delta Air Lines Wednesday slashed fares by up to 50 percent on several flights, and cut the fee for changing a flight to $50 from $100 to $50.

It also eliminated its restrictive Saturday-night stay rule.

Discount ripple effect
Delta officials said the cuts were introduced to allow it to better compete with budget competitors, adding that discounts would hurt revenue in the short run, but hopefully boost traffic and offset losses in the long run.

"This is really a PR move for Delta," said Terry Egger, airline analyst at Air Fulfillment Services, a company that negotiates airfare contracts. "They want to convince people that they're now a low-cost carrier, but that's not really the case."

Delta and the other carriers have slashed their most expensive fares in several markets as well as fares on tickets purchased at the last moment -- moves intended to appeal to business travelers who rely most heavily on the so-called walkup fares.

Egger noted most of Delta's lower fares, aimed mostly at leisure travelers, won't change that much.

But the move still could hurt the industry in the long term, especially since business travelers are the most profitable customers for most airlines.

Northwest, for example, said Wednesday the fare moves proposed by Delta would hurt sales and, if matched by other carriers, "immediately adversely and significantly affect industry revenues." Northwest still matched the fare cuts.

Merrill Lynch analyst Michael Linenberg told Reuters Wednesday that industry-wide fare cuts could cost airlines as much as $3 billion a year. The industry as a whole, hurt by higher fuel costs, is expected to lose about $6 billion overall this year.

According to Bestfares.com, the other carriers matched Delta on about 90 percent of the routes they directly compete in, and that most matched only the routes served by Delta.

"Where airlines are not competing with Delta, they'll still keep full and higher prices," Egger said, adding that they may be able to make up for losses on routes not served by Delta.

IP Logged