Southwest Airlines sale: More $40 flights ahead?
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.
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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.