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Air Travel

Airlines offer $30 fares to generate demand when the peak US travel season wanes

Jul 07, 2009

Southwest Airlines Co., the largest discounter, led six other major U.S. carriers in offering one- way fares as low as $30 to generate demand when the peak U.S. travel season wanes in September. The sale is Southwest’s biggest nationwide reduction in 13 years.

Delta Air Lines Inc., American Airlines, United Airlines, Continental Airlines Inc., JetBlue Airways Corp. and US Airways Group Inc. joined Southwest in offering sale prices today and tomorrow for travel Sept. 9 through Nov. 18. The rates are $30 each way for flights as far as 400 miles (644 kilometers), $60 for 400 to 750 miles and $90 for more than 750 miles.

U.S. air traffic declined in the first half of 2009 as businesses reduced travel in the recession. Airlines have used discounts to lure passengers, and American has said the industry had only two nationwide fare increases this year.

“While airline ticket prices have stabilized recently from their free fall, airlines are by no means out of the woods as oil prices remain volatile and demand precarious,” Rick Seaney, chief executive officer of fare-shopping site, said in an e-mail.

Delta, the world’s largest airline, No. 2 American, a unit of AMR Corp. and the other carriers matched the fares on competing routes, spokesmen said. The sale covers most of Dallas-based Southwest’s 68-city route map, Seaney said.

‘Somewhat Disappointing’

Southwest’s sale “is somewhat disappointing in that it suggests that bookings after Labor Day are weaker than would be considered normal for this time of year,” Helane Becker, a New York-based analyst with Jesup & Lamont Securities Corp., said in a note to investors. She rates Southwest “hold.”

The Southwest sale fares include $90 each way between Chicago and Houston or Las Vegas to Providence, Rhode Island; $60 from Baltimore to New Orleans, or Burbank, California, to St. Louis; and $30 for Albuquerque, New Mexico, to Denver and Baltimore to New York. The rates aren’t valid on Fridays and Sundays.

“The purpose of this sale is to boost our advance bookings for the fall,” said Ashley Rogers, a Southwest spokeswoman. “It’s important to get a head start on the fall in a difficult economic environment while reinforcing our low-fare image.”

It’s the biggest fare discount since Southwest offered $25 tickets in 1996 to celebrate its 25th anniversary, she said. The airline offered the low one-way fares on all nonstop flights between Aug. 19 and Oct. 31.

Jet-fuel prices for delivery in New York harbor have increased 41 percent since March 2. Southwest today said its traffic, or miles flown by paying passengers, fell 2.1 percent in June and 2.2 percent for the first six months of 2009.

Southwest fell 12 cents to $6.48 at 4 p.m. in New York Stock Exchange composite trading, as the 13-member Bloomberg U.S. Airlines Index declined 1.7 percent.

Airlines offer $30 fares to generate demand when the peak US travel season wanes


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