UA Implementing 'New Business Fare Structure' - 2003-01-06

United Airlines this morning announced 40 percent reductions off walk-up coach-class fares on flights to, from and connecting through Chicago and Denver. The discounted one-way fares do not require an advance purchase or Saturday night stay, include Economy Plus seating and are nonrefundable.

"United has been listening to our customers and testing variations of this new fare concept for more than a year in numerous Chicago and Denver markets," said Chris Bowers, senior vice president-sales and reservations. "We have been adjusting the tests over time and analyzing the results, and we are now ready to implement on a broader basis. We have settled on a new business fare structure that will be rolled out in many new domestic markets to and from Chicago and Denver and thousands of other connecting markets."

Some 7-day advance purchase fares also have been reduced, including a one-way price between Chicago and New York of $199.

The airline hopes these new fares will drive revenue by attracting more business travelers as it continues to work through bankruptcy proceedings.

Both American Airlines and Delta Air Lines also have been analyzing the impact of simpler and/or lower business fares in a number of test markets. "At a time when supply substantially exceeds demand, you have to experiment with structures that may stimulate demand," said Delta chairman and CEO Leo Mullin last week in a BTN interview. Mullin, however, did not elaborate on Delta's findings thus far.