By James Pilcher
Enquirer staff writer

AT A GLANCE

Here are some key points about Delta Air Lines' new fare system: • Domestic coach tickets are capped at $499 one way; first class are capped at $599 each. • Change fee falls to $50. • One-night stay, not necessarily on a Saturday, required for lowest leisure fares.

ONLINE POLL

Delta Air Lines today will unveil a major fare restructuring that lowers the price of flying out of Cincinnati by as much as 60 percent. The plan may remove the airport from the list of the nation's most expensive air travel venues.

"We're trying to give our local customers reason not to drive to Dayton, Indianapolis, Louisville, or Columbus," said Delta chief marketing officer Paul Matsen. "This is not just another fare sale - this demonstrates that we have heard our customers and that we are committed to operating as a customer focused company."

Atlanta-based Delta, struggling with billions of dollars in losses, hopes the lower fares will recapture as many as 2,500 daily travelers from Greater Cincinnati who choose to drive up to 2 hours to regional airports served by discount carriers.

The restructured fare system, called Simplifares, caps the most expensive domestic coach fares from Cincinnati at $499 each way.

It also pares down the fare structure, offering just six levels for coach travel. The airline said it is especially targeting business travelers.

The new system does not apply to international travel or flights to Hawaii or Alaska. But it does apply to all other flights that originate or end in Cincinnati.

Travelers welcomed the fare news. Delta has long been criticized for a fare structure that makes Cincinnati Northern Kentucky International the nation's second most expensive airport. "If fares are lower, that would obviously be attractive to save us money," said Tim Murphy, 48, of Dayton, who arrived at airport after a business trip to Kansas City. "If lower prices means they will maintain an active presence in Cincinnati, then I'm all for it."

The fare plan is the first initiative to emerge from the carrier's turnaround plan, which was presented to the company's board of directors for review Wednesday. Other details were not released.

Wall Street welcomed news that the restructuring plan was being considered. The company's shares closed Wednesday at $4.07, up 48 cents or 13 percent.

Delta is trying to turn around its economic fortunes, losing more than $5 billion since the Sept. 11 terror attacks, including $1.96 billion in the second quarter of this year alone. The company has said it may file for Chapter 11 bankruptcy protection if it cannot get $2 billion in cost cuts, including $1 billion annually in concessions from its pilots union.

According to the most recent Department of Transportation report, the Cincinnati airport - Delta's second-largest hub - had the second-highest fares in the country in the second quarter of 2003.

The agency's fare report measures "fare premiums," or percentages above the national average comparing similar flights, and during that period, Cincinnati travelers paid a 61 percent premium.

That situation was created in part by Delta's hub dominance here. The carrier and its Erlanger-based subsidiary, Comair, control more than 90 percent of the local market, based upon available seats.

For example, a last minute flight to Las Vegas from Cincinnati cost $1,171 Monday evening on Delta.com. But the most expensive flight from Indianapolis to Las Vegas on Southwest for the same itinerary was a little more than $600.

Under the new system, the most expensive flight to Las Vegas from Cincinnati would cost just under $1,000, excluding taxes and fees.

That pricing discrepancy has led to travelers to use other airports. A November 2003 study commissioned by local airport officials found that about one in four local fliers - or 2,500 a day - left the area to fly cheaper fares from such airports as Dayton, Louisville or Indianapolis.

The total impact on those airports of Delta's new fare plan is unclear.

However, Bluegrass Airport in Lexington could see up to a 5 percent drop in traffic, spokesman Tom Tyre said, adding that the impact would depend on which routes are affected and how deep the fare cuts are.

Matsen said that reclaiming those travelers, especially those who fly for business for local corporations such as Procter & Gamble, Federated Department Stores and Kroger Co., was a key motivation for the plan.

"We'll be out with mobile billboards in areas around those companies on Monday and Tuesday," Matsen said, adding that Delta is planning a major marketing blitz throughout Greater Cincinnati in the coming weeks.

While Delta is largely targeting business travelers, leisure fares will be lower as well, Matsen said.

Cincinnati travelers will still get discounts for booking early and for round-trips. Starting today, a leisure trip to Orlando, Fla., costs about $200 round trip before taxes and fees, compared with nearly $300 before the change.

But there will only be six coach fares available for any given flight - 14-day advance; 7-day advance; 3-day advance but non refundable; 3-day advance but refundable and changeable; walkup but non-refundable; and walkup that is fully changeable and refundable.

Previously, any given flight might have as many as 40 different fares, as Delta and other airlines used sophisticated computer systems to match supply with demand.

In addition, only a one-night stay will be required for advance tickets, not the Saturday night that was previously required. That move will help business travelers get more affordable tickets, Matsen said.

Delta also is lowering the ticket change fee to $50 from $100 for Cincinnati travelers.

Matsen said the company could see revenue drop initially with the fares going down, but hopes to offset that by reclaiming local fliers who use other airports.

Even with the new system, some Delta fares will still be higher to some markets than from the surrounding regional airports. The goal is to make Greater Cincinnati residents reconsider flying from here at somewhat lower fares for the convenience of not driving to a remote airport and connect back through the local airport.

"We really think we're going to stimulate the local market with this," Matsen said.

Staff writer Maggie Downs contributed.

E-mail jpilcher@enquirer.com