Delta Slashes Everyday Fares...

[North by Northwest]

Very interesting indeed. I do not see other Major carriers (esp. NWA) sitting byand allowing Delta to dictate and negatively impact their revenue with out punishing Delta somehow. I smell a downward, nasty nasty price war i.e "1991". There WILL be mortal causualties in this one. Dust off the resumes everyone, the earthquake is coming.

 

[WorldTraveler]

N by NW,
Do you realize that WN gets better yields on many of the markets it serves than do the legacy airlines? Passengers are willing to make a small jump from a leisure ticket to a discounted business ticket but they are no longer willing to pay thousands of dollars for an unrestricted coach ticket. DL will probably be better able get that fare differentiation than they have before.

The reality is that every legacy airline realizes that what DL did was the right thing to do although they probably would have preferred to do it on their timeline. DL believed it was right for them and that is part of business strategy. They say their business plan and the cost concessions they got were built around implementing a plan like this; other carriers were caught off guard so DL has the benefit.

Unlike Value Pricing for AA, there really is no way to go back. Customers have tasted even more what low fares are like and they will not pay more. Any carrier that decides they don't want these fares in their markets is certain to cut their throat? Customers will immediately ask the question "If DL as a legacy carrier can offer fares like this, how come XX can't?" where XX is your hometown legacy airline. It appears from some checking that most of the other big 5 carriers have matched at least some of these fares including in their hubs. Some like AA have not done the full deal and they will be marked as being more expensive without a significantly different product. Unlike America West and other LCCs, DL is large enough to take significant traffic from any other airline that doesn't match their fares.

The other legacy carriers have no choice but to match the fares and get their costs down or face an even faster demise. DL will likely get an aweful of positive credit for this initiatve for a long time to come.

 

[Whadayano]

Listen, no one was willing to pay $2400 for a RT first class ticket to the Coast anymore, everyone up there was an upgrade. So Dal is doing something smart. The folks who WILL pay $1200 for 1st will probably squeeze out some of the $399 skymile elites; next time maybe they'll consider paying $1200. So I think the change makes sense. I think AMR takes the biggest hit as they still have a higher mix of premium passengers. And the continuing devaluation of mileage programs continues...

 

[PBRmeASAP]

It's about time. Hopefully, DL will stick to its guns and keep this pricing structure in place for good. This could actually raise DL's yields if its done right.

The only real negative I see is that some of the DL's competitors will be very upset by this move. I can definitely see NW, CO or AA trying to undercut DL's fares in order to punish DL for this move. If this starts a massive fare war, it could seriously undermine DL's attempt to restructure.

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Just what Delta needs to do!!! Already in Debt up to the neck, using ancient airplanes that will need to be replaced in a few years and now having NorthWest (who has some money put in reserve) coming down to the same prices!! Delta just put a cut in their own throat!!