Airlines Launch Fare War; Some One-Way Tickets as Low as $25

As the summer travel season heats up, Southwest Airlines fired the first salvo in a new fare war Friday by dropping many of its prices for travel in the West and Midwest to as low as $25 one way.

United, American and Trans World Airlines quickly followed suit, and other competing airlines are expected to do so as well.

But there’s a big catch: Seats for the special fares will be limited. In United’s case, reportedly as few as 10% of a typical flight’s seats will get the special fare.

“There will be enough seats for sale, but they will . . . depend on the market and a whole lot of factors . . . as well as demand,” said John Hotard, a spokesman for American Airlines in Fort Worth.

In addition, TWA and American’s low fares won’t apply to flights from Los Angeles or Orange counties, spokesmen said.

American Airlines will match the fares in specific markets where the airline competes directly with Southwest, mostly in the Eastern part of the United States; TWA’s fares will apply for travel in 12 competing markets, mainly in the Midwest.

The special fares will be bargains. Southwest said its $25 one-way fare is good on any published nonstop route nationwide.

A special $50 one-way fare is available to any destination with published direct or connecting service. For example, the one-way fare from Chicago to Phoenix, which stops in St. Louis, would be $50, and the round-trip $100.

Some sample Southwest fares: Los Angeles-Oakland, $25 one way; Los Angeles-Chicago, $50; Orange County-San Jose, $25; Orange County-Seattle, $50; Burbank-Albuquerque, $50. The fares don’t include airport charges that can add as much as $9 per flight.

“All these offers come on the basis of a limited seat offer,” said Michael K. Lowry, publisher of AirWatch, an industry newsletter based in Lake Oswego, Ore. “So it’s hard to distinguish between what is a legitimate fare war resulting from financial distress by the airlines and what is an advertising promotion.”

In any case, it’s clear the airlines won’t make any money on the special fares.

“At that fare, you’d have to strap people to the wings to reach break-even,” said Peter Ostrowski, senior vice president at Plog Research, a travel market research firm in Reseda. “It appears to be just a quick boost, perhaps an experiment, to see how they can boost bookings.”

United Airlines said its $25 one-way fares and $50 round-trip tickets are good between Chicago and Baltimore, Chicago and Cleveland, Los Angeles and Las Vegas, and Los Angeles and Oakland.

Tickets can be purchased as late as one day before travel. But there are restrictions: Seats won’t be available during very busy travel times such as Labor Day weekend. And the fares are available for purchase through July 23, with travel from Aug. 19 through Oct. 31.

Tickets must be purchased within one day of making reservations and are nonrefundable, but at Southwest, they may be applied toward future purchases.

United set similar conditions for its fares.

At the Travel Store in Brentwood, corporate travel agent Jeff Bloom said the fares were already available. A round trip from Burbank to Phoenix, usually $124 with a week’s advance purchase, would cost $69 on Southwest on Aug. 14.

From Los Angeles to Oakland, the fare that week would be $53 on United (including airport charges).

Similarly, Los Angeles to Albuquerque would be $53 on Southwest but $121 on Reno Air.

Southwest announced the special fares in observance of its 25th anniversary.

Times wires services contributed to this report.