Update: Delta Air Lines Slashes Fares, Its Shares Fall

Delta Air Lines Inc., the nation's third biggest carrier, cut its fares on Wednesday by up to 50 percent for travel in the continental U.S., prompting fears of a new fare war and sending its shares sharply lower.

The Atlanta-based airline, which is restructuring to try to avoid filing for bankruptcy, said that no one-way economy fare would be higher than $499 and no one-way first-class fare would be higher than $599. It is also eliminating a rule that requires a Saturday-night stay.

The company said the new fare program, dubbed "SimpliFares," would reduce fees for changing tickets by half, to $50 from $100.

Analysts said other carriers will likely have to match Delta's cuts, forecasting a gloomy year for the airline industry.

Delta shares fell 51 cents, or 7 percent, to $6.80 by close of trading.

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