Continental Exec: Delta's 'Simplifares Are Simply Stupid' Thursday February 17, 11:34 AM EST NEW YORK (Dow Jones)--Continental Airlines Inc. (CAL) President Jeff Smisek said the lower fares set by rival Delta Air Lines Inc. (DAL) last month will cost Continental around $100 million in annual revenue. In January, Delta introduced what it calls Simplifares, a new fare structure that cut the highest fare class in half. Other airlines broadly matched the new fares in order to remain competitive, giving up revenue in the process. "Simplifares are simply stupid," Smisek said at a JP Morgan conference Thursday. "Our friends in Atlanta kind of finished off the domestic system for us." Smisek added he had anticipated fares to fall in the next couple of years, and Simplifares accelerated that process. Smisek wasn't the only executive Thursday to say the new fare will cause revenue to deteriorate. Northwest Airlines Corp. (NWAC) Chief Executive Doug Steenland and AMR Corp. (AMR) Chief Executive Gerard Arpey concurred. And even Delta executives Thursday said they anticipate a material hit to revenue this year. But Delta Chief Financial Officer Michael Palumbo said the new fares will protect Delta's routes from some low-cost competition. Continental executives also said they anticipate meeting their goal of cutting labor costs by $500 million by the end of the month. "We right now are focusing on Feb. 28. We told our employees that now is the best time. Any time past that time, the price goes up because we need $400 million run rate this year," Smisek said. "We are bargaining in good faith with our unions and in return they are bargaining in good faith with us." Continental executives also said they plan to boost capacity this year 5%, entirely through more international flying. -By Elizabeth Souder, Dow Jones Newswires; 201-938-4148; elizabeth.souder@ dowjones.com Roger EWROPS