Delta May Expand Simplified Fare System
{{#rendered}} {{/rendered}}A simpler, cheaper air fare schedule is reportedly coming to Delta Air Lines Inc. (DAL), a move that could lure back customers to an airline struggling to avoid bankruptcy.
Delta is planning to replicate nationwide a fare-cutting plan called SimpliFares (search) it has been testing since August in Cincinnati, leaving some flights 60 percent cheaper than before, according to a report in Time magazine.
The Atlanta-based airline wouldn't confirm or refute the report Monday, but airline industry analysts said they expected the change and one travel agent was already booking flights at lower fares.
{{#rendered}} {{/rendered}}The changes wouldn't mean cheaper flights for everybody. The main change would be a streamlined fare schedule to reduce sometimes-great fluctuations in what different fliers pay. Included in the changes would be elimination of the unpopular Saturday-stay requirements and cheaper fares for last-minute fliers, so the biggest savings would likely be felt by business travelers.
The airline also plans to halve ticket-change fees from $100 to $50, Time said. International flights would reportedly be unaffected.
The moves would make Delta, the nation's No. 3 airline, more like low-cost airlines that have remained profitable in recent years while bigger, older airlines have struggled to survive. An industry analyst said the simpler fare structures of budget carriers like Southwest Airlines Co. (LUV) are likely to be adopted by more of the older airlines.
{{#rendered}} {{/rendered}}"The whole sector domestically is moving in that direction," said airline analyst Ray Neidl of Calyon Securities. "People like to feel they're getting cheapest fare, that there's not this huge discrepancy of fares and it's hard to find the best one."
The report comes as Delta continues to fight to stay out of bankruptcy. The airline got a $1 billion concession from pilots, and a big loan from American Express, to avoid bankruptcy last October, but analysts have warned deep changes are needed to make Delta viable in the long term.
Last month Delta started wooing frequent fliers, who have complained that Delta was overcharging them. Delta got rid of some fees and made it easier to get upgrades.
{{#rendered}} {{/rendered}}Talking about those changes last month, chief executive Gerald Grinstein said that Delta has to do a better job giving customers what they want — low prices. "One of the goals we have is to gain that trust," Grinstein said.
A spokeswoman for Delta, Benet Wilson, would not confirm the nationwide fare changes Monday. "We have not announced any changes in the fare structure and we do not make public statements about fare structures before they are made public," she said.
But at least two travel agents called by reporters knew about the fare changes and were already using them. At Atlanta's Explorations Travel, owner Jean Pickard booked a flight for a business flier that usually costs $607 because she doesn't like to stay over Saturday nights. On Monday, Pickard booked the same Atlanta-to-Richmond, Va., flight and found it cost $270.
{{#rendered}} {{/rendered}}"It's going to make a lot of customers happy," Pickard said. "I think everyone's gonna have to match it now that Delta's going to this."
The airline analyst, Ray Neidl, agreed: "The old fare structure is not going to survive in the future."
Delta shares rose 4 cents to $7.52 on the New York Stock Exchange (search).