Business

Cheap airfare deals make sense for airlines

It might have seemed that some airlines had gone completely nuts over the past couple of weeks.

Southwest Airlines recently ran television ads that touted $69 fares, followed by promotions from Virgin America for fares starting at $59. Not to be outdone, Alaska Airlines peddled $49 fares -- a deep discount compared with the average one-way domestic fare of about $190.

These too-good-to-be-true deals usually come with a slew of restrictions, making them almost useless for most travelers. But industry experts say the fares make plenty of sense to the airlines.

The ultra-low fares usually drive traffic to an airline's website at a time when demand is slow. And with myriad passenger fees charged by the airlines, travelers who buy the cheap tickets are likely to spend enough on bag charges, food and other extras to make it profitable for the carriers, industry analysts say.

“Airlines would rather get some revenue for those seats than to fly them empty,” said Rick Seaney, chief executive of the fare-monitoring site FareCompare.com.

And even if travelers don’t book the super-cheap fares, visitors to airline websites might find other deals that appeal to them. Each year, 1 in 10 travelers books an unplanned trip because of great travel deals, said Henry Harteveldt, an airline industry analyst at Hudson Crossing.

“These are tactical tools used on a limited base,” he said.

Because airlines impose harsh travel restrictions on the deals, carriers don’t expect to sell too many of the super-cheap fares. The Southwest offer was limited to such routes as Albuquerque to Phoenix and Austin to Lubbock, Texas. At Virgin America, the  $59 fares were offered primarily for travel on Tuesdays, Wednesdays and Saturdays. The tickets were non-refundable and non-transferable.

Blackout dates on the Alaska, Southwest and Virgin America deals made it difficult for travelers to use the flights for Thanksgiving, Christmas or New Year’s Day travel.

 “Airlines are very careful when they launch these low fares,” Harteveldt added. “They are careful about which routes and what period” they specify in the sales.

ALSO:

Crowded airline cabins match record rate, study finds

At LAX's remodeled Bradley terminal, where's the Wi-Fi?

Plan to ease restrictions on electronics on planes is delayed

Copyright © 2014, Los Angeles Times
Comments
Loading