Delta Air Raises Cap on Its Highest Fares

Delta Air Lines Inc. blamed persistently high fuel costs Thursday as the nation’s third-biggest carrier raised the cap on its most expensive fares by $100, a move that was quickly matched by several rivals. Airline stocks rose on the news.

Atlanta-based Delta boosted the cap on one-way walk-up fares to $599 for economy class and to $699 for first class. The move comes six months after the company announced a ticket price overhaul designed to draw in more business travelers.

Thursday’s adjustment affects full-fare walk-up and some three-day advance purchases. United Airlines and Continental Airlines matched the move, and other rivals said they were studying it.

“When Delta launched SimpliFares in January, crude oil was selling at $43 per barrel compared to as much as $61 per barrel in recent weeks,” said Paul Matsen, Delta’s chief marketing officer. “Despite our best intentions to keep the current fare caps in place, we have been forced to find ways to offset this dramatic spike in costs.”

After the nationwide launch of Delta’s fare program in January, other major carriers lowered their most expensive fares as well.

Industry expert Terry Trippler, who runs ticket fare website CheapSeats.com, said Thursday that he expected other airlines to hike their one-way fares after Delta’s changes. “You could almost bet the rent on that one,” Trippler said.

He was right, with Houston-based Continental Airlines Inc. and United, a unit of Elk Grove Village, Ill.-based UAL Corp., doing so within hours of Delta’s announcement.

American Airlines, a unit of AMR Corp. in Fort Worth, and Northwest Airlines Corp., based in Eagan, Minn., are studying Delta’s fare change, spokesmen said.

Northwest had twice before tried to raise fares above Delta’s cap by $50 but failed in being able to maintain the increase.

Delta spokesman John Kennedy said the SimpliFares program had helped draw in more business customers over the last several months, although he didn’t have any hard numbers. He said that despite the changes being made Thursday, there were still many benefits to the program.

“The cap was merely part of the package so that people would know that they would never travel for more than this amount, and we’ve simply adjusted that,” Kennedy said.

He also noted that the sales of full walk-up fares and some three-day advance purchases accounted for fewer than 6% of tickets the airline sold.