In a bid to beat back the growing threat from budget carriers, Delta Air Lines will announce today that it is reducing fares by as much as 50 percent on most of its flights within the continental United States.
The move by the nation's third-largest carrier is expected to ripple through the airline industry as other carriers try to match Delta's cuts -- risking a drop in revenue -- or not -- risking a loss of passengers to competitors.
Northwest Airlines said Delta's move would be "revenue negative" and would "adversely and significantly affect industry revenues."
Delta executives argued that customers are demanding lower fares and a simplified fare structure similar to what budget carriers have.
"We've heard loud and clear from our customers. They did not find our current fare structure easy to use or understand," said Paul G. Matsen, Delta's chief marketing officer.
Matsen said the Delta move was in response to the rapid growth of the low-cost carriers, especially in the Northeast and Southeast, where Delta has a large presence.
Atlanta-based Delta also is eliminating its Saturday-night-stay requirement but is requiring passengers to stay over at their destinations at least one night. It also is capping its last-minute, one-way fares at $499 for coach seats and $599 for first class.
Delta's New York shuttle and its flights to Hawaii and Alaska are excluded from the new fare structure.
Business travelers who book late and pay high fares will probably find the steepest discounts on eligible tickets while travelers who make reservations weeks in advance will see their prices fall by smaller amounts because their rates are already discounted.
Fares dropped at other airlines yesterday as they began their usual New Year sales to help boost travel during the traditionally slow first quarter.
US Airways, which is reorganizing under Chapter 11 bankruptcy protection, is offering flights to such destinations as Grand Bahama Island for $180 round trip from Reagan National Airport and to Fort Lauderdale, Fla., for $100 from Baltimore-Washington International Airport. Tickets must be purchased by Jan. 10 and include restrictions, depending on the destination. Tickets to Florida must be purchased seven days in advance and a three-day minimum stay is required.
Dulles-based start-up Independence Air is offering seats to a variety of destinations for fares from $39 to $74 each way. Tickets must be purchased by Jan. 13 for travel between Jan. 11 and June 6. Other restrictions apply.
