Delta Air Lines CEO Richard Anderson yesterday may have inadvertently spilled the beans about "a new fare structure in Cincinnati." Sound familiar? It should. [more]
Delta in 2004 began tinkering with its fare structure in the Cincinnati market (specifically for flights to and from Cincinnati/Northern Kentucky International Airport), a precursor to its 2005 nationwide SimpliFares initiative. SimpliFares turned the industry on its head--for a while. It included fare caps, fewer fare types and fewer ticketing restrictions (including the abolishment of Saturday night stay requirements). Competitors matched to varying degrees. Corporate contracts were revised to match the new pricing construct. The industry wondered if SimpliFares would have more staying power than American Airlines' ill-fated Value Pricing from the early 1990s.
Ultimately, SimpliFares fell apart as Delta (and competitors) removed fare caps and reinstituted ticketing restrictions. What will be different this time? Impossible to say, at this point. Anderson said it would roll out the new fare structure in Cincinnati "very shortly" but provided no other details.
According to the Cincinnati Enquirer
(in an article picked up by USA Today
), Cincinnati has been "consistently the most expensive airport in America," with an average roundtrip fare in the second quarter of 2008 of $595, mainly attributable to "Delta's market dominance here--it handles 91 percent of local passengers."
With an ability to keep fares high in its fortress hub, Delta has annoyed some of the locals, many of whom look for cheaper flight options from places like Indianapolis and Louisville. Moreover, Delta yesterday identified Cincinnati as among its weakest markets. Point is, it has a lot to gain and a lot to lose, and the industry will be watching closely to see what the airline has in store.