Message Font: Serif | Sans-Serif
 
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next
Author: captbuddha Big red star, 1000 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 470  
Subject: Delta Cuts Corp. Discounts! Date: 6/29/2002 10:37 AM
Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Recommendations: 1
FYI: ****Capt.-out!

Delta discount erasure could irk business
travelersJune 28, 2002 5:54:00 PM ET
By Julie MacIntosh

NEW YORK, June 27 (Reuters) - Delta Air Lines Inc. (DAL) decided this week to stop offering corporate discounts on some of its lower airfares, a move that has industry watchers and some of its corporate clients up in arms.

Business travel traffic is 25 percent lower now than it was two years ago, and a majority of travelers surveyed recently expected a quarter of the cuts in corporate travel to be permanent, according to research from the Business Travel Coalition (BTC).

The depleted roster of corporate road-warriors is the most frequently-cited reason for continued financial distress at nearly all of the nation's air carriers, which have lost billions of dollars since Sept. 11.

But at a time when corporate spending remains incredibly fickle, Delta sent letters this week to some companies that frequently book its flights that said it would trim or completely eliminate discounts for all corporate accounts on its lower airfare classes.

"Of course, we are disappointed in Delta's action -- we had no prior notice of it before receiving a letter on Wednesday," said Carol Sanger, a spokeswoman for Federated Department Stores Inc. (FD), which is based near one of Delta's hubs in Cincinnati.

"The impact on Federated may not be as significant as for other companies," Sanger said. "(H)owever, it will cost us an estimated $150,000 to $200,000 a year. Obviously, this does not make us happy."

A spokeswoman for Atlanta-based Delta declined to comment on the matter.

At a time when continued attempts by the airlines to raise fare prices have failed, Delta's move to effectively increase airfares for business travelers "is the exact opposite of what is required to encourage corporations and individual business travelers to return to commercial aviation," the BTC said.

The changes could increase travel costs at the airlines' corporate customers anywhere from 15 percent to 30 percent, the business travel group estimated.

AirTran Holdings (AAI) unit AirTran Airways, which runs the second-biggest operation at Delta's main hub in Atlanta, could stand to benefit if business travelers looking for discounts shy away from Delta.

"What we've heard from our sales force is that they've seen Delta cut the discount off of the lower fares and not the higher fares," Airtran spokesman Tad Hutcheson said.

"We do compete, and it'll be interesting to see what happens," Hutcheson said.

In November 2001, Northwest Airlines (NWAC) also enacted a policy that eliminated corporate discounts on lower fares. REUTERS



Post New | Post Reply | Reply Later | Create Poll . Report this Post | Recommend it!
Print the post  
UnThreaded | Threaded | Whole Thread (1) | Ignore Thread Prev | Next

Announcements

Pencils of Promise - Back to School Drive
"Pencils of Promise works with communities across the globe to build schools and create programs that provide education opportunities for children."
Managing Your Wealth
Our own TMFHockeypop from Rule Your Retirement fame on the TV show Managing Your Wealth.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and "#1 Media Company to Work For" (BusinessInsider 2011)! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement