Delta, American Watch Revenue Vanish as New York Business Fares Tumble

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Delta, AMR See Revenue Vanish as New York Business Fares Tumble
By Mary Jane Credeur and Mary Schlangenstein


June 15 (Bloomberg) -- U.S. airlines faced with losses in the recession are slashing business-class fares from New York to London, Zurich and other finance centers by more than 50 percent to try to fill planes.

A business-class ticket from New York’s Kennedy Airport to UBS AG’s hometown of Zurich costs $1,838 for June, 51 percent cheaper than last year, according to travel Web site Bestfares.com. Flights to London Heathrow are down 56 percent to $1,994 as banks’ job losses erode demand.

“Poof! That revenue is just plain gone,” said Henry Harteveldt, a Forrester Research Inc. analyst in San Francisco. “The front of the plane is the moneymaker. These fares could be the difference between being profitable or not.”

International business-class travel is pivotal for U.S. carriers such as Delta Air Lines Inc. and AMR Corp.’s American Airlines, the world’s two largest. Without discount competitors on trans-Atlantic and trans-Pacific routes, the companies typically have been able to charge higher fares.

Premium tickets on overseas flights produce 25 percent of most carriers’ revenue, according to the International Air Transport Association, so the slump adds to the strain from dwindling leisure travel. IATA estimated on June 8 that North American airlines’ 2009 deficit may be $1 billion for a second straight annual loss. ..........(more)

The complete piece is at: http://www.bloomberg.com/apps/news?pid=20601109&sid=athn1c8K0PUA