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Southwest Airlines is letting travelers go from, say, Seattle to Boise or Albany to Baltimore for $40. Some experts say the move by Southwest Airlines could spark a fare war in the industry.It's only a three-day sale, but a move by Southwest Airlines to sell one-way flights for as little as $40 is sending a big message: A new round of fare wars may be on the way.
On Tuesday, Southwest Airlines announced bargain rates on tickets for hundreds of its US routes, with one-way prices of $40, $80, or $120 for flights taken between Aug. 23 and Nov. 16. The sale lasts through Thursday.
For $40, fliers can go one-way from Seattle to Boise, Albany to Baltimore, or Cleveland to Newark, among many other examples.
Industry analysts say it's a sign that, even after taking steps to fly fewer routes and keep planes fuller, airlines still don't have an easy time selling seats in the current soft economy. Many Americans want to travel, but their plans are price-sensitive.
Meanwhile, a jump in fuel prices over the past year has squeezed airlines, pushing their costs up and prompting them to raise fares, which in turn can crimp demand for tickets.
Some analysts say that, after doing fairly well during the summer busy season, the rest of the year could be a struggle for the industry.
Reason #1,457 to love Southwest Airlines: The company, celebrating its 40th anniversary, launched a sale on Tuesday with insane one-way fares starting at $40.
The Celebrating 40 Years With $40 Fares One-Way sale starts with prices at $40 for short haul flights (up to 450 miles), $80 for mid-range flights (451 to 1,250 miles) and $120 for flights longer than 1,251 miles (not including tax and fees).
The sale is good for travel from August 23rd to November 16th, but travelers have to purchase tickets by 11:59 PDT on Thursday in order to take part in the sale, the Los Angeles Times reports.
Blackout dates: September 1, September 5, September 6, and October 10. Fares not good on Fridays or Sundays.
Meanwhile, Southwest's discount rival, JetBlue, canceled their famous "all you can jet" promotion for this year. JetBlue spokesman Bryan Baldwin told USA Today: "All You Can Jet was designed to get people talking about JetBlue in a fun way and also introduce new customers to the JetBlue experience to gain their loyalty and future business, and this program accomplished that in 2009 and 2010." Oh well.
Clearly, people are happy as clams about the Southwest sale, as I'm still waiting for the Southwest website to click through to see if I can get away for Labor Day. Oh, where to go? Where to go?
* Business travel discontent a red flag for industry
* Biggest airlines again underperform with consumers
(Reuters) - No-frills Southwest Airlines Co (LUV.N) again topped rivals in customer service while premium-paying business travelers are the least satisfied with U.S. carriers overall, a new survey showed on Tuesday.
Airlines maintained their low overall standing among a variety of industries included in the American Customer Satisfaction Index, which is compiled by the University of Michigan's Ross School of Business.
"There's been a bubbling discontent for airlines for some time but the situation has worsened slightly from a year ago," said ACSI managing director David VanAmburg.
Passenger satisfaction with airlines dropped by 1.5 percent to a score of 65 on ACSI's 100-point scale. Scores have generally hovered in the mid-to-low 60s for the past decade.
Travelers cited poor service, higher prices and fees for baggage and other services as the main causes of their discontent.
Airlines have raised fares and fees to counter soaring fuel costs and preserve a fragile financial recovery.
Southwest continues to outperform rivals with consumers, according to the survey of 2,000 consumers.
The low-fare carrier posted an ACSI score of 81 in part because it has not taken anything away from customers and then offered it back for a fee, VanAmburg said.
Southwest heavily promotes its policy of not charging for bags.
Among Southwest's main rivals, Continental scored 64, American 63, United (UAL.N) and US Airways (LCC.N) tied at 61 and Delta Air Lines (DAL.N) dropped to 56 on the ACSI scale. American Airlines (AMR.N) was unchanged at 63.
All other carriers, which include smaller lower-fare and service-oriented businesses, posted a 76, a 1.3 percent improvement.
A red flag for airlines in the latest survey is the dissatisfaction of business travelers, who the industry courts relentlessly and depends on for its highest fares.
"We're seeing a greater discontent among business travelers simply because they are putting themselves out there more to be let down by the airlines or an experience," said VanAmburg.
Recent mergers, known to have a detrimental affect on satisfaction and geared specifically to attract more business travel, pose added pressure.
Delta plunged to the bottom of all the airlines for customer satisfaction one year after completing its acquisition of Northwest, ACSI reported.
The fate of United, which absorbed Continental last year, and Southwest, which acquired AirTran, remained uncertain, it said.
On Tuesday, Southwest Airlines announced bargain rates on tickets for hundreds of its US routes, with one-way prices of $40, $80, or $120 for flights taken between Aug. 23 and Nov. 16. The sale lasts through Thursday.
For $40, fliers can go one-way from Seattle to Boise, Albany to Baltimore, or Cleveland to Newark, among many other examples.
Industry analysts say it's a sign that, even after taking steps to fly fewer routes and keep planes fuller, airlines still don't have an easy time selling seats in the current soft economy. Many Americans want to travel, but their plans are price-sensitive.
Meanwhile, a jump in fuel prices over the past year has squeezed airlines, pushing their costs up and prompting them to raise fares, which in turn can crimp demand for tickets.
Some analysts say that, after doing fairly well during the summer busy season, the rest of the year could be a struggle for the industry.
"We are worried about what happens after Labor Day," Helane Becker, an analyst for Dahlman Rose & Co, told the Associated Press. "We're going to see less demand and more discounting."
In addition to Southwest's move, JetBlue also announced sales on post-summer flights this week.
And the travel-search arm of Bing.com offers forecasts that even midsummer fares could fall in price.
Consider a round trip flight from Chicago to Los Angeles, from July 19 to July 26. The Bing Travel search finds prices of $306 round trip – and suggests that fliers wait to purchase the ticket, because it's expected to fall by another $45.
If the Bing forecast proves accurate, that would make that July flight roughly identical with the prices Southwest is offering for later in the season ($240, or $120 each way).
Similarly, if you're buying in late August, other airlines like Continental already beat Southwest's price, offering the flight for $239 as of Tuesday afternoon, according to Bing Travel.
Airfares to Europe , while not cheap, have also come down.
"We are now seeing the biggest savings on fares to Europe for departure Aug. 14-28," says Tom Parsons of BestFares, writing in a Dallas Morning News column. "From Dallas, many cities are averaging in the $800 to $950 range for round-trip flights, including those to Dublin, Rome, Amsterdam, Prague, and Barcelona."
So, high fuel prices or not, airlines still need to fill seats – sometimes with fare wars. But they've also shown a willingness to cut money-losing routes. More of that could happen this fall as well.
The Celebrating 40 Years With $40 Fares One-Way sale starts with prices at $40 for short haul flights (up to 450 miles), $80 for mid-range flights (451 to 1,250 miles) and $120 for flights longer than 1,251 miles (not including tax and fees).
The sale is good for travel from August 23rd to November 16th, but travelers have to purchase tickets by 11:59 PDT on Thursday in order to take part in the sale, the Los Angeles Times reports.
Blackout dates: September 1, September 5, September 6, and October 10. Fares not good on Fridays or Sundays.
Meanwhile, Southwest's discount rival, JetBlue, canceled their famous "all you can jet" promotion for this year. JetBlue spokesman Bryan Baldwin told USA Today: "All You Can Jet was designed to get people talking about JetBlue in a fun way and also introduce new customers to the JetBlue experience to gain their loyalty and future business, and this program accomplished that in 2009 and 2010." Oh well.
Clearly, people are happy as clams about the Southwest sale, as I'm still waiting for the Southwest website to click through to see if I can get away for Labor Day. Oh, where to go? Where to go?
* Business travel discontent a red flag for industry
* Biggest airlines again underperform with consumers
(Reuters) - No-frills Southwest Airlines Co (LUV.N) again topped rivals in customer service while premium-paying business travelers are the least satisfied with U.S. carriers overall, a new survey showed on Tuesday.
Airlines maintained their low overall standing among a variety of industries included in the American Customer Satisfaction Index, which is compiled by the University of Michigan's Ross School of Business.
"There's been a bubbling discontent for airlines for some time but the situation has worsened slightly from a year ago," said ACSI managing director David VanAmburg.
Passenger satisfaction with airlines dropped by 1.5 percent to a score of 65 on ACSI's 100-point scale. Scores have generally hovered in the mid-to-low 60s for the past decade.
Travelers cited poor service, higher prices and fees for baggage and other services as the main causes of their discontent.
Airlines have raised fares and fees to counter soaring fuel costs and preserve a fragile financial recovery.
Southwest continues to outperform rivals with consumers, according to the survey of 2,000 consumers.
The low-fare carrier posted an ACSI score of 81 in part because it has not taken anything away from customers and then offered it back for a fee, VanAmburg said.
Southwest heavily promotes its policy of not charging for bags.
Among Southwest's main rivals, Continental scored 64, American 63, United (UAL.N) and US Airways (LCC.N) tied at 61 and Delta Air Lines (DAL.N) dropped to 56 on the ACSI scale. American Airlines (AMR.N) was unchanged at 63.
All other carriers, which include smaller lower-fare and service-oriented businesses, posted a 76, a 1.3 percent improvement.
A red flag for airlines in the latest survey is the dissatisfaction of business travelers, who the industry courts relentlessly and depends on for its highest fares.
"We're seeing a greater discontent among business travelers simply because they are putting themselves out there more to be let down by the airlines or an experience," said VanAmburg.
Recent mergers, known to have a detrimental affect on satisfaction and geared specifically to attract more business travel, pose added pressure.
Delta plunged to the bottom of all the airlines for customer satisfaction one year after completing its acquisition of Northwest, ACSI reported.
The fate of United, which absorbed Continental last year, and Southwest, which acquired AirTran, remained uncertain, it said.
