Delta announces that they were going to implement a low cost pricing strategy. Then the first news wave happens.
Delta then actually implements their new lower prices. The second news wave begins. Then other airlines begin to match fares. The third wave starts.
All three of these news waves are now going simultaneously.
How do you know a news wave when you see one … frequent Google News. The Delta story has been a fixture on the front page of Google News for at least a week now… and I’m getting a bit bored with it!
Here are some cuts from current articles related to this ongoing story:
“But it remains to be seen if Delta and the other so-called legacy carriers can win back the desperately needed revenue that business customers like La Rosa provide. The fare cuts also started a battle that some carriers, already battered by last year’s fuel prices and big labor costs, may not survive.”
” Stop me — no, stop Jerry Grinstein — if you’ve heard this one: “Yes, we lose money on every sale, but we make it up in volume.”
Grinstein is chief executive of Delta Air Lines, and “make it up in volume” is exactly what he outlined last week when he announced new, lower fares for many of Delta’s domestic flights, all part of a simpler fare structure. “Introducing SimpliFares,” is how Delta’s Web site greeted visitors early Wednesday morning, when the changes went into effect. “One airline is changing everything.””
” But for all the headlines the air-fares war garnered this week, only a select group will see a substantial benefit.
“The average person will probably be paying the same amount as before,” said Michael Boyd of the aviation consulting firm The Boyd Group.”
“Continental appears to have put its own stamp on some markets, integrating changes from both Delta and American.
On Thursday, a one-way walk-up Continental ticket from Bush Intercontinental to Los Angeles International was $1,356, according to Tom Parsons, chief executive of Bestfares.com. On Friday, a walk-up could be had for $499 – matching Delta.”
“Delta Air Lines Inc.’s strategy to recapture business travellers by overhauling its fare structure is looking like a risky financial bet whose success probably will depend on whether the nation’s third-largest carrier can further cut costs.”
“The losses, as measured by the American Stock Exchange Airline Index, only deepened as competing carriers rushed to match Delta’s price action. Delta cut the most expensive fares by up to half and eliminated Saturday night stay requirements. In the days following the news, the index sank 14.21 percent.
Delta’s pricing action, a result of competition from low-cost carriers like AirTran, JetBlue Airways Corp. and Southwest Airlines Inc., will likely accelerate industry restructuring, said Smith Barney analyst Daniel McKenzie.
When it comes to determining which companies will survive, cash flow will be key, he said.
“It is no coincidence we are seeing simplified pricing. It was inevitable for the industry, given the aggressive growth of low-cost carriers,” McKenzie said.”
Murdok | Breaking eBusiness News
Your source for investigative ebusiness reporting and breaking news.
