Continental sees bigger revenue hit from Delta SimpliFares
Dateline: Thursday March 10, 2005
Continental Airlines warned yesterday that matching Delta's SimpliFares fare reform in competing markets will cost it an estimated $200 million in annual revenue, or around 2% of 2004 revenues of $9.7 billion, well above an earlier forecast of a $50 million impact.
In a filing with the US Securities and Exchange Commission, Continental stated: "Our experience to date as a result of Delta's fare reduction has demonstrated [they] are not being sufficiently offset by increases in passenger traffic so as to make them revenue positive, and any associated cost reductions are immaterial to date."
To add insult to injury, the carrier also worried that "our operating results may be affected by an even greater amount due to the expense of handling the additional passengers stimulated by the lower fares."--Perry Flint
Source ATW-online
Dateline: Thursday March 10, 2005
Continental Airlines warned yesterday that matching Delta's SimpliFares fare reform in competing markets will cost it an estimated $200 million in annual revenue, or around 2% of 2004 revenues of $9.7 billion, well above an earlier forecast of a $50 million impact.
In a filing with the US Securities and Exchange Commission, Continental stated: "Our experience to date as a result of Delta's fare reduction has demonstrated [they] are not being sufficiently offset by increases in passenger traffic so as to make them revenue positive, and any associated cost reductions are immaterial to date."
To add insult to injury, the carrier also worried that "our operating results may be affected by an even greater amount due to the expense of handling the additional passengers stimulated by the lower fares."--Perry Flint
Source ATW-online