This article from NYTimes.com has been sent to you by psa188@juno.com. Delta Is Set to Introduce a Low-Fare Airline November 20, 2002 By MICHELINE MAYNARD Delta Air Lines is set to introduce its version of a low-fare airline today in an attempt to compete with carriers like JetBlue Airways, Southwest Airlines and AirTran Airways for budget-minded passengers. Delta plans to hold a briefing with journalists and airline analysts to discuss the venture. A spokeswoman for the airline, Catherine Stengel, said the airline would not be announcing a name for the carrier and declined to give further details yesterday. Delta announced in August that it planned to pursue a low-fare strategy and named John Selvaggio, the former chief executive at Midway Airlines who had since joined Delta, to head the venture. Industry analysts expect the new carrier to begin operations early next year. It is likely to concentrate its flights, at least at first, between Kennedy Airport in New York and cities in Florida. Like other major airlines, Delta, which is based in Atlanta, has been struggling to cut costs and fend off competition from low-fare airlines, which have posed a big threat to its leisure travel business. The airline has already announced plans to cut spending by $2.5 billion through 2005. On Monday, it said it would adopt a new cash-balance pension plan in place of its old formula, a move it said would save $500 million a year. In discussing its concept for the airline, Delta has indicated that it will devote part of its fleet of 121 Boeing 757 jets to the venture. The jets would probably be configured to include all-coach seating, allowing each to fit 198 passengers, said Jamie Baker, an airline analyst with J. P. Morgan in New York. Delta bases most of the pilots who are able to fly these planes in Atlanta, according to its pilots' union. But the pilots could easily travel to New York or Florida for assignments if Delta chooses not to open a separate base for them. Mr. Baker, who predicted Delta's announcement in a research note last week, said yesterday that the new airline is not likely to use the Delta name, nor will it be called Delta Express, which is the name of a low-cost venture that Delta operates in Florida. "This is a product that's designed to appeal to leisure passengers, and a product designed in part to retard the growth of low-fare airlines in key Delta markets," Mr. Baker said. To save the most on labor costs, the airline would want a separate labor agreement with its pilots' union, as it has at Delta Express, where pilots were originally paid about 20 percent less than their counterparts at the main airline who fly similar Boeing 737's. That differential has shrunk to about 10 percent. But Karen Miller, a spokeswoman for the Air Line Pilots Association, which represents Delta's pilots, said the union had not been approached by Delta about negotiating a contract for the new venture. Ms. Miller said the pilots' master contract requires that any new venture use existing Delta pilots, which would rule out hiring new pilots for the low-fare carrier. Without a separate agreement, pilots for the new venture would have to be paid the same rates as they now receive for flying Delta aircraft, she said. http://www.nytimes.com/2002/11/20/business/20AIR.html?ex=1038805442&ei=1&en=57c9c721fbed3ae5 HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales@nytimes.com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help@nytimes.com. Copyright 2002 The New York Times Company