ATLANTA – A wave of fare sales has spread across the airline industry in the early days of the new year as the weak economy continues to put pressure on carriers to fill seats even after they drastically reduced capacity and some expressed willingness to cut more.
Many experts and even executives at some airlines had expected that after deep capacity cuts went into effect starting in September, the number of fare sales going forward would be fewer and farther between. But fuel prices have come down significantly, and the weak economy has eroded demand for air travel.
Even so, on average base airfares outside of the travel periods for the recently launched sale fares are higher today than in the last few years, said Rick Seaney, head of airfare research site FareCompare.com. He noted 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 charged by some of the carriers.
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 for several carriers this year is that the discounts are for travel extending 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 s It has done a New Year's fare sale for several years now, spokeswoman Robin Urbanski said.
Most of the airline offers come with restrictions that vary by carrier from advance purchase requirements to minimum stay requirements to blackout dates.
The matching has already started.
American matched both the AirTran and Virgin America initiatives in markets in which they compete, American spokesman Tim Smith said.
In normal situations, travelers generally see more airline fare sales from September through mid-February, with exceptions for peak holiday periods, Smith said. But now, the economy is sputtering.
"Obviously, less demand has had some effect on fare sales, but again most are aimed at targeted markets and many of the sale fares are at somewhat higher levels than past sales," Smith said.
Last year, airlines cut jobs, made dramatic reductions in capacity, sold aircraft, raised fares and imposed new fees for checked baggage and other once-free amenities to stem the bleeding from losses that were expected, by one analyst's estimate, to total $4 billion for 2008, excluding one-time items. If oil prices remain low and the economy doesn't worsen, some analysts expect the industry to be profitable in 2009.