Delta’s Pricing Overhaul Revisited

The Delta pricing overhaul story got much more play in the mainstream press than I expected yesterday.  While it certainly is great news, I think we need to remember that history has not looked kindly on this type of fare change.  Yes, America West changed its fares successfully, but it was also kicked out of an alliance with Continental because of it.  American Airlines was the first to try this 12 or 13 years ago, and it did not last a full year because of fare pressure from other airlines.  If Delta lowers its fares and sees reduced revenues (which their CEO has said will be the case in the short run) to the point where it needs to declare bankruptcy, will they really stick with the new plan?  The mainstream press has gotten rather giddy about this, but we’ll have to wait to see the real lasting impact.

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