US majors are responding to the disastrous slump in business travel with their first fare restructuring in years, with cheaper fares aimed at corporate fliers.

American, Delta and United Airlines have also eliminated such restrictions as the Saturday-night stay. American reduced unrestricted fares and simplified its fare structure on 23 "city pairs", or routes, then expanded that to more than 400 markets.

United has slashed unrestricted fares on direct flights from its hubs in Chicago and Denver and on thousands of flights in smaller markets. Other airlines matched those cuts. J P Morgan's Jamie Baker says those routes represented 32% of total domestic revenues.

The strategy is gaining momentum as a test of assumptions about the elasticity of business fares, but no firm results are in yet, says Delta president Fred Reid.

Source: Airline Business