Eagle-eyed fliers land airfare deals

Small-scale price war drops ticket prices at select times

A United Airlines jet passes over Whittier, Calif., en route to Los Angeles International Airport in July. Passengers in some markets are seeing bargain airfares on some flights.
A United Airlines jet passes over Whittier, Calif., en route to Los Angeles International Airport in July. Passengers in some markets are seeing bargain airfares on some flights.

Airline passengers should not expect widespread sales or cheap flights home for Thanksgiving, but a number of cities are seeing low prices at off-peak hours -- prices the industry has spent years trying to eliminate.

Fares for roundtrip flights between Chicago to Boston have been posted for $80, San Francisco to Las Vegas for $67 round trip and New York to Los Angeles, with a connection, for $150 round trip.

"This is the big break consumers have been waiting for in response to lower fuel prices," said Seth Kaplan, managing partner of industry newsletter Airline Weekly.

The price of oil is at the lowest level in 6 1/2 years, and the industry is saving billions of dollars on fuel, giving airlines leeway to cut fares but still post healthy profits. Airlines also have added larger, more efficient planes to their fleets while packing more seats into existing jets. So, while the number of domestic flights is down slightly over the past 12 months, there are now 3.4 percent more seats for sale -- too many to meet the demand in all cities. To fill those extra seats, airlines have had to offer discounts.

Still, airlines are being selective. Forget finding a deal for busy holidays or Mondays, Thursdays and Fridays when business travelers fly. The best prices are for flights on traditionally slow days such as Tuesday, Wednesday and Saturday. And it helps if Southwest Airlines, Spirit Airlines or Frontier Airlines flies the route.

For instance, Frontier recently had a sale for members of its club who pay an annual $50 fee. One-way tickets were being offered for $15, including taxes.

American Airlines and -- to a lesser extent -- Delta Air Lines and United Airlines are matching some of the discount fares. By doing so, they actually undercut the low-cost carries because Spirit and Frontier charge customers extra to use overhead baggage bins or to have a drink of water.

"They're trying to force them out of the market, and they have the power to do this because they are making record profits," said George Hobica, founder of travel deal site AirfareWatchdog.com.

Spirit and Frontier each carry less than 2 percent of all domestic passengers. American, United and Delta made $6.6 billion in combined profits during the first half of this year, so they can afford to fight back on routes such as Chicago to Atlanta.

American spokesman Casey Norton said the airline "constantly looks at how we compete against a wide variety of airlines -- from low-cost carriers to premium global brands."

Delta and United declined to comment. However, Delta has expanded its "Basic Economy" fare to more than 450 markets. Fliers booking these tickets typically save $15 each way, but they are not given advanced seat assignments, can't cancel or change the flight, and are last to board.

Fare wars were destructive to the industry in the 1980s. Airlines were focused on being the largest carrier on a route, even though it often meant losing money.

Today's airline industry is more disciplined, so the fare wars cause much less damage. The airlines still collect substantial fares on highly profitable business routes and for holiday travel. Additionally, they take in billions of dollars in fees for checked baggage and other things that were included in the ticket price back in the 1980s.

Even passengers unable to take advantage of today's bargain-basement deals are getting a bit of relief.

The average cost of a roundtrip domestic ticket, including taxes, purchased during the first seven months of this year was $494.12. That's down $5.41, or 1.1 percent, from the same period last year, according to the Airlines Reporting Corp., which processes ticket transactions for airlines and travel agencies.

Prices are still higher than they were in 2011, 2012 and 2013, even when adjusted for inflation. And the small drop in ticket prices is nothing compared to the 31 percent savings airlines have seen on their fuel bills since the start of this year.

One city having an outsized impact on fares is Dallas, where a federal law that banned most long flights from Dallas Love Field was lifted in October.

Led by Southwest Airlines, the Dallas market has seen an 8.6 percent increase in seats for the 12 months ending in August, more than double the growth for the entire country.

Wolfe Research analyst Hunter Keay said that two out of every five domestic flights -- local market ones or connecting trips -- can be affected by what happens in Dallas.

For instance, if Southwest offers a cheap fare from New York to Los Angeles, connecting in Dallas, American tries to match that. That forces United to match the fare for its flights, even if they connect in Chicago.

"If passengers are willing to connect in Dallas, they are willing to connect in Chicago," Keay said.

The Associated Press purchased a $40.10 one-way ticket on American Airlines from New York's JFK Airport to Dallas-Fort Worth, departing at 3 p.m. on Tuesday. Government taxes and fees were $15.91, leaving American with $24.19 for the 1,391-mile trip.

All but five seats on the 160-passenger jet were occupied. Many passengers were coming off highly profitable international flights that arrived earlier in New York. Others were just connecting in Dallas, heading to places such as Oklahoma.

Brandon Perdue, a college student, booked the cheapest one-way ticket he could find from New York to his home in Los Angeles four days before traveling. Even with a connection in Dallas, it cost $650.

"I feel ripped off," Perdue said. It didn't help that he paid $25 to check a suitcase and an extra $100 fee because it weighed more than 50 pounds.

The AP bought its ticket 22 days in advance, at a time American's booking algorithm predicted low demand for the flight.

"If you hadn't booked the ticket, the seat would have likely gone empty. They're better off taking your low fare than nothing at all," Kaplan of Airline Weekly said. "But American would lose a lot of money if everybody on the plane was paying what you paid."

Business on 08/27/2015

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