By James Pilcher
Enquirer staff writer

With full-page color ads in Friday's newspapers and a slick new brand name, Delta Air Lines has begun its big push to trumpet its reduced-fare strategy.

Company executives won't comment, but the new SimpliFares program is clearly a test that could be rolled out nationally over coming months.

The program is touted as a major reform, cutting the number of fare codes on a flight from more than 70, in the most extreme example, down to six for coach and two for first class.

Delta officials call the shift the most radical change to its fare structure in at least a decade. Delta is hoping to fill more seats on its local flights - and generate cash flow - with passengers who now go to other regional airports for lower fares.

Industry experts and analysts say that given the inroads that low-fare carriers have made, the time might be right for such a simplification - an idea that has failed for most carriers.

"Every airline already has a pricing scheme like this somewhere on their books, but they just haven't made as big a splash about it as Delta has there in Cincinnati," said Darryl Jenkins, a professor at Embry-Riddle Aeronautical University.

"They should have done this several years ago," he said.

"And this one could take, I think, if Delta and others do it right."

Thursday, Delta unveiled the new pricing system, lowering its highest fares and putting a cap on all coach travel to and from Cincinnati/Northern Kentucky International Airport at about $1,000 for a round trip. The cuts also affect many leisure fares.

But it also limited the types of fares to six in coach and eliminated some travel restrictions, most notably the Saturday-night-stay requirement, and reduced the change fee to $50 from $100.

Delta's dominance in the local market ,with its second-largest hub here, previously gave it such pricing power that the Northern Kentucky airport was the second-most-expensive airport in the United States for air travel.

More than 2,000 travelers a day, including business fliers, have turned to Dayton, Louisville, Lexington, Indianapolis, Columbus and other airports for lower fares.

Delta officials said the fares would still be a bit higher here than elsewhere, and that prices for an individual flight could change daily. The fares still are affected by the ebb and flow of supply and demand, how many seats are offered at lower prices and how many are saved for last-minute fliers.

Branding important

The move is a huge bet for Delta, which has lost more than $5 billion since the Sept. 11 terror attacks and is warning that it might have to resort to bankruptcy to solve its problems.

Its stock closed up 21 cents Friday at $4.27.

Delta executives would not acknowledge that SimpliFares is a test for a potential national program, citing federal regulations prohibiting advance warning on pricing.

Yet Paul Matsen, Delta senior vice president and chief marketing officer, said the Atlanta-based company would be watching the initiative closely, pointing out that the company has actually branded the new product.

"And a brand is a promise that this will be here over the long term," he said. "This is not just about fares, but obviously a part of a broader process within the company ... that we expect to go across our entire business."

Yet such efforts have failed in the past - crushed by intense competition in the airline industry. American Airline's "value pricing" effort about 10 years ago was gone in less than a year.

"There is a long history of carriers launching these initiatives with much fanfare, only to have them die out eventually," said Miami University management professor David Walsh.

"And this is a tough business to make a dollar in these days. But obviously Delta put a lot of thought into this and is committed to making this work."

Matsen said Delta officials studied the American experiment but said it is invalid now, given the inroads that low-fare carriers such as Southwest and JetBlue have made into the market nationally.

Others match Delta

Other airlines serving the local market quickly matched Delta's new fares Thursday.

Tom Parsons, founder and CEO of www.bestfares.com, said the new system also gives Delta the flexibility to match fare sales by other carriers as compared with the failed American effort, which set an absolute minimum floor. He also said that airlines may have 20 to 30 fare codes on most flights - and a Delta flight from New York to Florida had 73 codes - but usually only use six.

He also points out that Delta has periodically tested different fare systems in cities such as Portland, Ore., since the Sept. 11 attacks.

"So if the media works there and they get the response they need, it certainly will be rolled out. Whether that lasts depends, as always, on whether everyone else matches, and given the current state of things, I don't think they have a choice."

---

E-mail jpilcher@enquirer.com