Air Transport World

A new direction: Delta tries for a rational pricing model.(Delta Air Lines Inc.)(Editorial)

There is an old handyman's saying, equally applicable in our era of programmable televisions and coffeemakers: "When all else fails, read the directions." To its credit, Delta Air Lines has become the first US legacy carrier to read the directions. Its domestic fare reform unveiled last month (see News Briefs, p. 9) belatedly acknowledges what business travelers, Wall Street analysts and just about everybody not employed in a network airline revenue management department have been saying for years--the pricing model is fractured beyond repair.

During the current crisis, the Big Six network airlines have had two related problems: The unwillingness of their most valuable customers to continue to bear a disproportionate share of the revenue burden and an inflated cost structure that made the revenue contribution of the majority of their passengers irrelevant to the creation of profits. …

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