Airline To Cut Fares, Fees In Hopes Of Staving Off Bankruptcy

How do you stay out of bankruptcy court? Delta Airlines has an answer: cut prices and thereby cut profits. It's a gutsy move aimed at making Delta more competitive in the marketplace and it's just about to get underway, according to Time Magazine.

Delta, still smarting from the failure of a dispatch computer that grounded all of subsidiary Comair's 1,100 flights on Christmas Day, will cut fares, eliminate restrictions and perhaps even cut fees in an attempt to win more customers.

The nation's number three airline has been working on the plan since last summer. In August, it rolled out a prototype scheme in Cincinnati -- Comair's hub -- offering domestic coach tickets to anywhere in the continental United States for no more than $499. First class tickets were going for no more than $599.

"Delta's success in the current aviation marketplace will depend on our ability to provide both good value and a good flying experience," said CEO Gerald Grinstein back in August.

Some industry-watchers think Delta is trying to emulate the LCC's -- low-cost carriers that have survived the slump that began with 9/11 and have even profited while legacy carriers posted huge losses and some, like US Airways and United, went bankrupt.

To that end, Delta is overhauling its route system and rethinking its Atlanta hub, in hopes of making more seats available while reducing congestion.

FMI: www.delta.com