On Thursday, Southwest Airlineschopped prices nationwide, with most fares under $200 round-trip (plus taxes and fees). Even better, the sale isn't a flash-in-the-pan. It's good for travel through the summer. Book by April 6 for travel between April 2 and Aug. 14, 2009.
AirTran, American, Delta, and United have matched the fares on most of the routes flown by Southwest. It's the most amazing airfare sale since 2001.
The catch: A 14-day advance purchase is mandatory. Otherwise, tickets are available every day of the week except for Fridays and Sundays, Fourth-of-July weekend, and Memorial Day weekend. Routes include every major airport that Southwest flies to, except for Fort Lauderdale and Washington, D.C.
Why is this happening now? You might think this is because of the recession, and that airlines are slashing fares to get more people traveling. That's partly true. But it's a bit more complicated than that.
On the hand, the number of passengers flying is down 12 percent from a year ago. On the other hand, the airlines have taken about 10 to 15 percent of capacity out of the system, meaning they have grounded planes and stored them in the desert. Planes are flying about three-quarters full on average, according to the latest "load factor" reports. So the next time you fly, your plane might feel pretty full.
What this fare war is really about is Southwest trying to steal market share away from the other airlines by undercutting them on price. The other major airlines, such as American, United, and Delta, are hurting because sales of business class tickets are down 17 percent on average. These airlines depend for a lot of their profit on the sales of business class tickets, the same way that pizza parlors depend on sales of beer for a lot of their profit. With corporations nationwide telling their employees to fly coach, however, business class sections are increasingly empty. Southwest, which only has economy-class service, sees an opportunity to steal many of these passengers away.
What's special about this fare sale?
This isn't some flash-in-the-pan gimmick. This is a broad-brush, end-of-the-world fare sale. There are millions of these tickets out there, so it's not a bait-and-switch.
You don't have to be traveling at Tuesday morning on a 6 a.m. "redeye" to claim these fares. The fares are good for travel from April through mid-August. So if you're planning any trip between now and then, you can save. You can take a long weekend vacation, or travel from Saturday to Saturday, which are the two most common types of travel.
What was behind Southwest's decision to do this?
Last year, the company went into the red (financially) for the first time ever. So Southwest is trying to drum up some business, stealing away customers from its rivals.
Why would other airlines follow suit?
Southwest flies more passengers than any other airline now, so when it barks, the competition listens.
What is the ultimate outcome for the consumer?
Great bargains. And if you haven't flown Southwest Airlines lately, you should know that these fares represent real deals. Southwest doesn't charge sneaky baggage fees or fees for snacks on board or nickel-and-dime you in other ways.
What does this mean for travel in general, etc.…
This is fantastic news for hotel owners because surveys show that Americans are cutting back the most on hotel spending out of all of their travel expenditures. So getting people flying and traveling again is key for the roughly 20,000 hotel managers nationwide who need to put heads in beds to stay in business. For the more than 130 million American households that still have steady income coming in, this is terrific news, too. If you can afford it, this is a terrific time to book a summer vacation.
I tried to book the sale fares, but I couldn't find them.
This fare sale has been going on since Thursday, so the deals have disappeared on some routes since we initially told you about this price war. If you can adjust your trip dates by a day or two, however, you will probably still find tickets for under $250 on routes that last summer cost $450 or more, once you account for last summer's high fuel surcharges.
(This post was updated on the weekend with additional info.)