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The Honolulu Advertiser
Posted on: Wednesday, January 7, 2009

Airlines discount fares as recession empties seats

By Harry R. Weber
Associated Press

ATLANTA A wave of fare sales has spread across the airline industry in the early days of the new year as the weak economy leaves carriers unable to fill seats even after they drastically reduced capacity and some have considered cutting more.

Many experts and even executives at some airlines had expected that after deep capacity cuts went into effect, starting in September, fare discount sales would be fewer and further between. But fuel prices have come down significantly, and the weak economy has eroded demand for air travel.

Even so, on average, regular fares are higher today than in the past few years, said Rick Seaney, head of airfare research site www.FareCompare.com.

He noted that there were 30 attempted airfare hikes between summer 2007 and summer 2008, two-thirds of which were successful.

The fare sales just announced do not affect fees for baggage or other services.

It's not unusual for airlines to announce fare sales in January there were 17 or 18 announced in January 2008 but what's different this year is that several carriers are extending the discounts to travel as late as April, May or June, Seaney said. The sales last January were typically for travel through March, he said.

Seaney said he believes uncertainty in the economy is the reason for the change.

"They're not sure what's going to happen at the last minute," Seaney said.

AS LOW AS $39

A handful of major carriers and discount carriers have launched fare sales since Dec. 31. Others are expected to follow with sales of their own, or to at least match discounts offered by rivals on competitive routes, Seaney said.

Discount carrier AirTran Airways, a subsidiary of Orlando, Fla.-based AirTran Holdings Inc., yesterday announced a nationwide sale with one-way fares starting as low as $39.

The fares, available for purchase through Jan. 15, are good for travel to and from Florida and Puerto Rico through March 11, and other sale fares are good for travel through May 20.

"We are uncertain about the economy and we are trying to build business on the books for the winter and spring," AirTran spokesman Tad Hutcheson said.

Burlingame, Calif.-based Virgin America, a U.S.-controlled and operated airline that is a separate company from Virgin Atlantic, also announced a fare sale yesterday, for travel through June 10 to all cities the carrier serves.

Nonstop one-way fares range from $59 for San Francisco to Las Vegas, for example, to $139 for New York to Los Angeles.

Billionaire Richard Branson's Virgin Group is a minority share investor in Virgin America.

COMPETING DEALS

New York-based JetBlue Airways Corp. said Monday it is offering a fare sale to more than 40 destinations in the Northeast, Florida, California and the Caribbean including a $74 one-way fare from New York's JFK airport to Orlando, Fla. For most routes, travel must take place between Jan. 12 and April 1.

Other carriers that have launched fare sales recently include:

  • Dallas-based Southwest Airlines Co., for travel between Jan. 15 and April 30.

  • Fort Worth, Texas-based AMR Corp.'s American Airlines, for travel within the U.S. between Jan. 14 and March 4, and between March 5 and April 30 at slightly higher fares.

  • Chicago-based UAL Corp.'s United Airlines, for travel within the U.S. from Jan. 14 to March 4 and to several foreign destinations as late as April 30.

    United's fare sale was launched Dec. 31. It has done a New Year's fare sale for several years, spokeswoman Robin Urbanski said.

    Most of the airline offers come with restrictions that vary from advance purchase requirements to minimum stay requirements or blackout dates.

    The fare-matching has already started. American has matched both the AirTran and Virgin America initiatives in markets in which they compete, American spokesman Tim Smith said.