Delta slashes ticket prices by up to 50 percent
Published: Friday, January 7, 2005 at 6:01 a.m.
Last Modified: Thursday, January 6, 2005 at 11:52 p.m.
The Wednesday launch of "SimpliFares" - which slashed Delta's ticket prices by up to 50 percent, put caps on the cost of "walk-up" fares and reduced the cost of ticket changes - is seen by many as a move to recapture customers who have been leaving the major airlines in favor of low-cost alternatives, such as Jet Blue and Southwest Airlines. It's a time of uncertainty for many of the major players in the industry, with Delta facing significant financial strain and US Airways, another of the five major carriers, still in bankruptcy.
Airport CEO Rick Crider said the new rates could help Gainesville and other airports its size by bringing ticket prices in line with those of low-cost carriers typically found at major airports. And while the price of a ticket on the Gainesville Delta Connection carrier, Atlantic Southeast Airlines, is still higher than a Delta fare at Orlando or Jacksonville for most major destinations, other factors may make Gainesville a more economical choice, he said.
"When you start to calculate the value of your time, the wear and tear on your car, gas and parking, you can blow through $50 or $60 in no time," Crider said.
The new pricing schedule comes several months after two new airlines, Continental Connections and Northwest Airlines, began service in Gainesville, kicking off a sharp increase in passengers at the airport. The airport continued its upward trend through November, Crider said.
Almost 40 percent more passengers passed through Gainesville Regional Airport this November than in the previous year, according airport statistics.
But while Delta's new fares at Gainesville Regional Airport may compare favorably to its prices at other airports in the area, Andy Bailey, a travel agent with the Bailey Travel Network in Gainesville, said customers will likely still be drawn out of town to fly discount carriers.
"They (Delta) are going to be a little bit more competitive, but they're not going to go below what a Jet Blue rate is going to be," Bailey said.
The real target of SimpliFares is likely business travelers, who make up the backbone of Delta's market, Bailey said. Often those flying on business can't commit to flights far enough in advance to take advantage of the lowest rates for low-cost carriers, he said.
Gina Pesko, a spokeswoman for ASA, said about 80 percent of ASA's passengers are traveling on business.
Business travelers are the ones most likely to benefit from caps on the airline's "walk-up" fares, which keep the price of last-minute purchases below $499 for coach seats and $599 for first-class seats, Bailey said.
Other major airlines, including Northwest Airlines and US Airways, have already dropped the price of their fares to compete with Delta on major routes.
This behavior can lead to a "fare war," in which airlines try to undercut the prices of their competitors, said Bob Robar, a travel agent with Travel Centre in Gainesville.
And that could lead to a general restructuring of ticket prices throughout the industry, Robar said.
US Airways spokeswoman Amy Kudwa acknowledged that the airline, which also flies out of Gainesville, was adjusting some of its prices to remain competitive, but pointed out that it had been phasing in a similar proposal, called "GoFares," since April.
Kudwa said US Airways has been matching Delta's prices on competitive routes. In addition, US Airways has continued rolling out GoFares, which will eventually restructure the pricing for all domestic flights, Kudwa said.
About 29 percent of US Airways flights have been made a part of GoFares since the program's launch in April, including flights from Orlando and Jacksonville, Kudwa said.
GoFares from Jacksonville to Washington, D.C., are available for as little as $99 each way, she said.
The roll-out of GoFares, initially spurred by competition from discount airlines, is being accompanied by cost-saving measures at US Airways, Kudwa said.
"We're working very diligently to get those costs down to the level of our low-cost competitors," Kudwa said.
Representatives from Northwest Airlines responded to requests for comments on pricing with a prepared statement.
"Northwest Airlines has always offered its product at competitive prices and will continue to do so," said Kurt Ebenhoch, a spokesman for Northwest. Ebenhoch would not elaborate on the airline's pricing plans.
Representatives of Gulfstream International Airlines, a Continental Connections affiliate and the fourth carrier at Gainesville Regional Airport, did not respond to requests for comment.
Jeff Adelson can be reached at (352) 374-5095 or email@example.com.
|San Francisco (SFO)||$369.80||$537.30||$219.80|
|Washington, D.C. (IAD)||$269.80||$228.30||$259.80|
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