Delta Tweaks Fare Experiment

Delta Air Lines today adjusted its ongoing fare experiment by eliminating peak fares on some advance purchase tickets, according to J.P. Morgan Securities analyst Jamie Baker.

"Northwest initially removed its sell-up fares in experimental Delta markets late last night, followed by a Delta match midday today," Baker said in a research note. "Delta's test walk-up fare is now 35 percent below typical full Y levels, versus an earlier, blended 21 percent discount."

That 35 percent moves Delta's walk-up fare level closer to that of American Airlines, which is testing 40 percent reductions in a handful of markets from its Dallas Ft. Worth hub. The Delta test thus far is confined to 2,000 smaller-market city pairs.

Travel managers generally applauded the tests but cautioned that it is too early to draw conclusions. "We are seeing clients embrace it and hearing carriers reporting favorable comments about the new pricing structure," said Eric Henderson, director of supplier relations in North America for Rosenbluth International, suggesting smaller and midsize companies with traditionally smaller corporate discounts may be more receptive to the new fare levels. "This is a different world and carriers will take risks and embrace things they would not have a few years ago, for many reasons."

Meanwhile, other carriers continue smaller-scale tests, mainly in markets where they square off against discount rivals. Continental Airlines, for example, continues to test lower fares on certain hub routes, such as Cleveland-Los Angeles and Houston-Los Angeles. "We have made fare adjustments to be more competitive with low-cost carriers, not matching completely, but getting close," said Dave Hilfman, Continental vice president of multinational sales and revenue programs. "It has been fairly revenue neutral but the results still are inconclusive."