Airlines in Transcontinental Price War

The major U.S. airlines are involved in a transcontinental price war. With some fares now under $250, consumers probably won’t object.

However, as Forbes cautions, the airlines won’t be so thrilled. These low prices result in a high cost per seat mile, which is a major threat to profits.

Currently, passengers can fly from Chicago to Los Angeles for $49, from Dallas to San Francisco for $40, and Denver to Dallas for a mere $25.

Those prices are expected to increase, as demand decreases once children return to school. However, competition from discount carriers like Spirit and Frontier will force the legacy airlines to keep prices relatively low.

Although these lower fares are very basic, evidence suggests consumers will still embrace them.

Airlines used to devote most of their focus to travelers on more expensive business fare tickets. Now, with these low-cost fares, they are attempting to appeal to leisure travelers as well.

Leisure travelers tend to be less interested in luxury and perks and are very price-sensitive, according to United President Scott Kirby.

United has been forced into heavy discounts at its hubs in the northeast and midwest. However, even Southwest, which was once seen as the discount-friendly option, has faced challenges from less expensive carriers.

This fall, for only $236 dollars, customers can fly from New York to major west coast destinations like Los Angeles, San Francisco, and Seattle.

There are also good deals to and from other major east coast destinations. Selected October flights from Los Angeles to Boston on carriers like Alaska, Spirit, and Delta currently range from $254-$289.

Airlines are also offering short-haul discounts on routes like Burbank-San Jose.

This price war has largely affected domestic fares. However, with carriers like WOW and Scoot offering cheap flights to Europe and India, the price war seems destined to go international.

About the Author

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Svilen Petrov
My name is Svilen Petrov and I’m founder and chief editor at Wings Journal. Wings Journal is an independent media, which provides you daily with the most interesting and actual news for air companies, airports, and aviation technologies.

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