So, What’s the Response to the Delta Announcement?

We’re starting to hear the first responses from other airlines to Delta’s fare overhaul.  According to the WSJ (which, I’m happy to note, quoted me), airlines appear to be matching in limited markets, but no carrier has yet to announce a full fare overhaul as Delta has announced. 

Financial analysts say that this move could cost the airline industry $3 billion in revenue, and the stock market responded harshly.  I think the market punished the likes of America West and AirTran a bit unfairly, as those carriers will not have to cut fares in many markets (if any) to stay competitive.

Also not discussed much was the fact the Delta’s announcement doesn’t eliminate fare sales, or certain restrictions on the lowest fares (those leisure travelers use).  Nor does this announcement imply that the lowest fares are any lower than current fares (in fact, it’s entirely possible that the lowest fares will actually increase).  Also omitted was discussion of the counterattack I’m expecting from Northwest and Continental.  My prediction?  Look for changes to reciprocal frequent flyer benefits and lounge access.  I also expect to see some crazy low fares to Delta hubs to try to make a point.  I’ll keep you posted…

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