Airlines’ Battle a Boon for Travelers

Excerpted from Washington Post, “Downturn Puts Air Travelers on Cloud Nine”, by Sholnn Freeman, March 14, 2009

* * * * *

Airlines have rushed out coast-to-coast travel deals for as little as $99 each way for the spring and summer as the economic downturn has taken hold. Continental Airlines and United Airlines, fighting it out on routes between Washington and Los Angeles, have priced round-trip tickets under $200. Airlines in recent weeks have cut ticket prices as much as 50 percent from a year ago.

The fare war comes as American companies scale back business travel and skittish consumers put off vacation plans, putting new pressure on airlines that only a year ago were fighting high fuel costs.

Yet some travel analysts are skeptical that travelers will buy, even at those prices. “With 600,000 or 700,000 people losing their jobs every month, they are asking themselves, ‘Can I really afford this?’ “

* * * * *

Airlines began the year thinking the passenger market wouldn’t be so bad. Many had spent 2008 cutting less profitable routes and scaling back the number of flights, giving them more room to boost prices on the seats that remained.

Operationally, flight cutbacks mean fewer planes stacking up at airports, alleviating congestion. The government has reported that airline on-time rates are at their best level in years, even at busy New York airports.

Airlines began offering discounted fares in October after Wall Street banks began to buckle, grounding bankers and other financial executives who paid top dollar for transatlantic tickets. The steady stream of price cuts continued over the winter holidays. Now the discounting is spreading into the spring and summer — historically the strongest profit period for airlines as travelers take vacations.

“This is a major war,” said Tom Parsons, chief executive of BestFares.com, a discount travel Web site. “We never expected airfares like this in June or July of last year. We would have expected air fares double this.”

Edit by DAF

* * * * *

Full article:
http://www.washingtonpost.com/wp-dyn/content/article/2009/03/13/AR2009031303564_pf.html

* * * * *

Want more from the Homa Files?
Click link => 
The Homa Files Blog

* * * * *

One Response to “Airlines’ Battle a Boon for Travelers”

  1. TK Says:

    FYI – hotel rooms are dirt cheap for business travelers reading this. I typically use Hotwire or other discount services. I have not paid more than $95/night in cities like Chicago, Philadelphia, and phoenix recently.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s