By Dan Schlossberg
ConsumerAffairs.com
June 27, 2007
Thanks primarily to the success of low-cost competitors, major airlines have dropped domestic airfares this summer for the first time in three years.
Even though the costs of staff, fuel, and maintenance continue to rise, carriers are concerned that consumers will forget about them and take most of their business to such discounters as JetBlue, Southwest, and AirTran.
The average roundtrip air ticket this summer costs $340, a price 2 per cent lower than last years average, according to an analysis of a million tickets by the enormous Sabre reservations system. Fares are especially low to Orlando and other Florida cities, along with Denver and Chicago.
In some cases, prices are so good that the American Automobile Association (AAA) is suggesting that customers fly to their destinations and rent cars there.
Fares spiked higher last year because high demand combined with reduced capacity. That is not the case in 2007, with a 2 per cent increase in available seats and less persistent demand for domestic tickets.
Southwest, a discounter that consistently turns profits while keeping fares down, added nearly 7 per cent to its capacity over last summer.
Expansion by Southwest, AirTran, JetBlue, and other low-cost airfares has also prevented the seven legacy carriers from imposing fare hikes on domestic routes.
The downside is that most flights are booked nearly to capacity, meaning that it is difficult for travelers to find substitute flights if they are bumped or their flight is canceled.
International tickets remain high, however. Fares to Europe are up about 10 per cent for an average price of $997 roundtrip in coach.
