New Fare Structure will Disrupt Low-Cost Airlines

6th Jan 2005

Today’s announcement by Delta
Air Lines of its new SimpliFares program has one mission: to disrupt the
growth of low-cost airlines, says Tom Parsons, CEO of, an
internet travel information web site. For the past few years, Delta, along with the other major legacy carriers
have watched the low-cost carriers, such as Southwest, AirTran, JetBlue,
Spirit, ATA and America West erode market share, and more importantly,
lower domestic airfares dramatically. These both have had a significant
impact on the legacy airlines. Today, US Airways and United are in
bankruptcy, and their futures are not clear. Other major airlines have
lost billions of dollars in the past year.

While Delta’s new fares are still higher than many of its low-cost
competition, Delta’s proximity to more people in smaller cities and major
airports may mean more passengers will stick around and fly Delta out a
close- in airport, rather than drive to an airport with a low-cost carrier.

“This move will increase Delta’s passenger yield, and at the same time,
takes a swat at the low-cost airlines,” says Parsons. “This may be the
only move left to slow down the low-cost carriers.”’s Tom Parsons, one of the most sought-after travel industry
experts in the United States, has been chasing down hidden travel bargains
and bringing them to the traveling public for 20 years. Parsons regularly
appears on NBC’s Today Show, ABC’s Good Morning America, CBS’s The Early
Show, CNN, Fox and MSNBC.


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