Low-cost airlines can drive down fares as much as 67%, study says

Discussion in 'General Discussion | Travel' started by gregm, Apr 27, 2014.  |  Print Topic

  1. gregm

    gregm Gold Member

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    Airline mergers have put more than 70% of the nation’s domestic traffic in the hands of four major carriers. But low-cost airlines still have some influence over airfares.

    A new study shows that when an airline such as JetBlue, Spirit, Frontier, Alaska and Southwest launches service on an existing domestic route, the average price from all carriers drops as much as 67%....


    http://www.latimes.com/business/mon...-fares-20140425,0,7163065.story#ixzz306hL8E6c
     
  2. WilliamQ

    WilliamQ Gold Member

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    Good news for all of us!
     
  3. blackjack-21

    blackjack-21 Gold Member

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    I think the key word in the article is "temporarily". If the low cost airlines can dig in and last with the competition from the bigger guys, then the lower fares may be around for a while, but if not, as we've seen in the past with the discounters being chased out, those great fares disappear quickly.

    And with the competition getting smaller over the years with the mergers among the majors, less reason for them to follow the discounters for long.
     
  4. eponymous_coward
    Original Member

    eponymous_coward Gold Member

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    Well, WN's only been around making profits for 40 years now... ;)
     
    WilliamQ and blackjack-21 like this.
  5. Muerl
    Original Member

    Muerl Gold Member

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    Oh hey I know that guy.

    Its almost always someone going after a route that is WAY overpriced. For example any domestic nonstop with 1 carrier operating it from Boston will have this happen. Usually this is a Hub route.

    BOS-EWR, BOS-PHL both had this happen (PHL twice)

    BOS-CVG could stand to have this happen to it.

    I know XYZ-CVG is almost universally stupidly expensive.

    A lot of the time this calls for hidden city ticketing.
     
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  6. blackjack-21

    blackjack-21 Gold Member

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    I'm sure someone will correct me if I'm wrong, but didn't WN make a big show of coming to Philly a while back and when that happened airfares from there on the other airlines dropped to compete with their arrival. Not too long ago (and here's where I may be wrong) WN made a quiet exit from PHL and fares suddenly returned to their higher level without the intense competition from WN at that hub. While this may not have hurt WN's bottom line in the long run, their discounted fares, at least from this airport, came and went when they did.

    Also noticed today that Frontier announced that they're started a charge for carryon bags, and while that may not change the fares on their computing routes from Denver or other hubs, the major airlines, at least not as yet, haven't followed this low cost carrier into that fee structure, so even with their lower fares, other fees may in time make up the difference.
     
  7. Muerl
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    Muerl Gold Member

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    Yea, I mentioned this to the author, that WN had tried to make a go of BOS-PHL (and PVD/MHT->PHL) about 2 years before b6 did. I remeber they used to advertise during sox games.
     
  8. ella
    Original Member

    ella Silver Member

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    I certainly don't see any benefit of Spirit or Frontier being at IAH. And in many cases, WN out of HOU is more expensive than UA out of IAH, so there's no WN benefit either.
     

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