Delta Revises Fare System—Benefits Business Travelers
Jan 5th, 2005 | By Jared BlankThough no longer a surprise, Delta announced that it revised its fare system today, eliminating Saturday night stays, getting rid of round trip requirements (for the most part), reducing change fees to $50, and capping coach fares at $499 each way and first class fares at $599 in the lower 48 states. If you read the fine print, you’ll note that some very inexpensive fares still require a round trip purchase.
Despite what you’ll read all day long in the newspaper, this change is really a benefit for business travelers, not leisure travelers. Delta has noted that 70% of coach flyers already pay less than the $499 cap. Nor does this revision really put Delta in line with lowfare carriers—Southwest and JetBlue are capped at $299 each way. Plus, JetBlue only charges $25 for changing a flight (Southwest doesn’t charge one at all). The real benefits are the elimination of Saturday night stay on some lower fare tickets, and the cap on first class fares.
Keeping in mind that airlines cannot announce fare changes prior to making them, it was quite interesting to see Northwest’s press release yesterday basically threatening Delta not to make this change. I wouldn’t be surprised if the government has something to say about that. Given that, the majors are going to take a little while to decide whether to match this. As Northwest (and Delta) note, this will be a revenue negative change for the near-term and few (if any) of the majors are in a position to do anything that is revenue negative. A bigger question is whether Northwest and Continental and freeze Delta out of their alliance; neither of the 2 airlines is happy about this change, and Continental eliminated an alliance with America West after they made similar changes a year or two ago.
Finally, people keep asking what happens to Song with this change. I assume nothing will happen to it. It has served as a great means of testing new ideas (including fares), and I suspect it will continue in that role.
The link to the NW press release is 404. Did they remove it already?
Hm…interesting. It was gone from PR Newswire this morning, which is why I linked to the NWA site. I just revised the URL, and the link should work now.