Brancatelli on Business Travel — Delta's SimpliFares: Not Simple, But Better

Brancatelli on Business Travel — Delta's SimpliFares: Not Simple, But Better

The new Simplifares structure has too many rules, restrictions, gimmicks and caveats, and they all undermine chief executive Jerry Grinstein’s claim that Delta finally understands that the frequent-flying public wants “easy, accessible and reliable prices.”

But let’s also be realistic: SimpliFares is good news, especially for business travelers who have been pummeled by obscenely high walk-up fares and fleeced by the heinous Saturday-night stay rule that all but proclaimed that the Big Six thought frequent flyers were mindless cash cows who could be mercilessly milked for every penny of their T&E budgets. SimpliFares may not, in actuality, be simple, but it is a reasonable and a generally honest attempt to fix a pricing system that has been broken since about three days after the dawn of airline deregulation.

And this is not a Zen thing: We needn’t fret about whether SimpliFares means that the business-travel fare structure is half full or half empty. We know that the Big Six fare glass was empty earlier on. So half full or half empty today, SimpliFares at least gives us some hope that the dunderheads running the Big Six have finally begun to comprehend that We the Customer will only fly with carriers that offer rational fare systems.

In case you’ve been snowed in at an airport this week and missed the news, here are the highlights of what Delta introduced:

+The end of the Saturday-stay rule.

+The reduction of the ticket-change fee to $50 from $100.

+A $499 cap on one-way coach fares and a $599 cap on one-way first-class tickets.

+Just four levels of advance-purchase coach fares: 3-, 7-, 14- or 21-day.

Sounds good, right? But Delta apparently couldn’t bring itself to keep SimpliFares truly simple. Here are the lowlights:

+Advance-purchase tickets still require a roundtrip, and most of them require a one-night stay in place of a Saturday stay.

+SimpliFares does not include international travel and doesn’t even cover the entire United States. It only applies to the 48 contiguous states and not even every route. On the Delta Shuttle between Boston, New York and Washington, for example, fares remain offensively high. (A New York/LaGuardia-Washington/National flight still costs around $240 one way, which is more than $1 per flight mile.)

+Also exempt from SimpliFares: Delta codeshare flights operated by Continental, Northwest and Alaska airlines and even Delta Connection commuter flights operated by SkyWest.
+SimpliFares adopts the vile ticketing surcharge added last year by other Big Six carriers: An at-the-airport ticket purchase incurs a $10 fee, and a ticket booked by telephone costs $5 more.

SimpliFares should be simpler, and it isn’t nearly as elegant or as understandable as American’s lamented 1992 Value Pricing system. But it is a better way to price tickets, especially for us business travelers who now might actually be able to afford a walk-up fare and might even be able to pay for first class without hoping for or begging for an upgrade.

As expected, the not-quite-so-simple SimpliFares has been greeted with a mix of indignant howls and hastily contrived fare adjustments from the other Big Six carriers.

Just before Delta announced SimpliFares, Northwest issued a bizarre, we-don’t-know-what’s-coming-but-we-hate-it-anyway statement. By the next morning, however, it had largely matched wherever it competes with Delta. American Airlines then issued a wildly misleading statement about its competitive response. Despite what American’s boilerplate would have the superficial observer believe, American only matched Delta’s coach- and first-class price caps on a capacity-controlled basis. Its unrestricted coach- and first-class walk-up fares are often $200 to $600 more than Delta is now charging. By late in the week, Continental, which has been living in pricing denial for several years, hadn’t reacted at all. Nor had United or US Airways, possibly because both carriers have been consumed with bankruptcy-court machinations.

So what’s it all mean in the real world? Have business fares really declined? Frankly, as I scribble this just 36 hours after Delta’s announcement, the fare landscape is fragmented and fluctuating. My best guess – and I stress this is a guess – is that things are moving in the right direction. But I’d certainly advise holding off on any unnecessary ticket purchases for the next few days.

But if you must buy now, I did a real-time check of fares between New York and Los Angeles, the nation’s most prestigious, most competitive and often the busiest air-travel market. Here’s what I found when I went searching for a coach ticket to fly the next day between 8 and 9 a.m.

Cost of flying New York-Los Angeles

Airline Route Pricing Change* Departing
American JFK-LAX $262.70 $100 8:00 a.m.
America West JFK-LAX $257.70 $100 8:00 a.m.
Continental EWR-LAX $480.70 $100 8:45 a.m.
Delta JFK-LAX $262.70 $20 8:15 a.m.
JetBlue JFK-LGB $212.70 $20 8:30 a.m.
United JFK-LAX $842.70 $100 8:55 a.m.**

NOTES: Prices are for the lowest nonrefundable fares for nonstop flights on 1/7/05 offered at the airlines’ respective Web sites on 1/6/05. *Change fee **United’s Web site also offered a lower fare of $262.70 for a flight at 6:58 a.m.

Ironically, for all the sound and fury, you still might be better off flying JetBlue Airways than Delta or any of the Big Six. You’ll not only pay $50 less than Delta, but JetBlue’s change fee is still lower than Delta’s new $50 fee. JetBlue’s walk-up coach fares top out at $299, not $499. Most JetBlue coach seats offer more leg room (34 inches) than Delta coach seats (31 inches). And JetBlue passengers get free at-seat television, too.

But at least SimpliFares puts Delta back in the game. That $50 premium Delta is charging does have its own benefits: You get SkyMiles, and SkyMiles beats the hell out of TrueBlue, JetBlue’s useless frequent flyer plan. Perhaps most importantly, Delta has a premium-class cabin on its New York-Los Angeles flights. You can try to snare an upgrade from Delta’s $262.70 coach fare — – or give Delta $557.70 for a confirmed seat up front.

And let’s be honest: When was the last time a Big Six carrier even had a compelling case to make against rational-fare airlines like JetBlue, Southwest, America West, Frontier, AirTran or the others?

That alone makes SimpliFares a giant leap forward for Delta and any of the other Big Six carriers that choose to follow Delta’s lead.

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