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Travel How Sly Travelers Cut Their Airfares in Half

17:05  04 december  2019
17:05  04 december  2019 Source:   online.wsj.com

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Published May 11, 2016. How to cut your airfare in half . That’s because airfare prices can and do change at any time as airlines tweak fares to see what travelers are willing to pay during high demand periods, and what will entice travelers to board planes when demand is low.

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Want to save some money on airfares? Find an airline looking to elbow in on a rival’s turf.

And watch for an unprecedented bonanza of new, cheaper options in 2020.

Airlines announce new service six to nine months before actually starting flights. As with any business, it can take time to build customer traffic. When a new flight comes online, carriers must fill thousands of empty seats. Competitors often already have direct flights on that route.

Southwest Airlines announced nonstop flights between San Diego and Maui starting April 14. Hawaiian and Alaska airlines already fly that route nonstop. But two weeks before Southwest’s flight launches, the lowest round-trip fare available for a four-day trip was $818 in a recent spot-check. Two weeks after the new flights start, the lowest round-trip fare for a four-day trip was only $303, a 63% decline.

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“The easiest way to stimulate demand is with price,” says Rick Seaney, chief executive of travel-data firm 3Victors.

Airlines have gotten so good at forecasting demand that carriers often avoid the flashy sales of the past to stimulate bookings. But new routes are an area that can still see major, unexpected price changes.

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Booking app Hopper scoured its database of 50 trillion itineraries. It found that the average price reduction after a low-fare carrier came into a market was 17% between late 2017 and early 2019. On average, year-over-year demand increased by 30%—low fares get people flying.

Savvy travelers have long known to look for announcements of new service to find cheap places to go, and to pounce on cheaper tickets if they know they’ll fly a certain route and hear of new service. It typically requires a lot of planning—you may be booking six months before departure.

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He said the network airlines then cut their increases in half to avoid charging more than their low- fare competitors. Seaney said U.S. airlines will continue to test price increases in coming weeks to see how much travelers will tolerate. Some analysts believe airlines will drive customers away if they raise

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A check of airline schedules by 3Victors found that American, Alaska, Delta, Frontier, United and Southwest combined had more than 60 routes they flew regularly in the first half of this year that they didn’t fly in the first half of 2018.

But the strategy is likely to pay extra dividends next year, when the Boeing 737 MAX gets cleared to fly again, and the new flights won’t be a six- or nine-month wait. Boeing has built and parked hundreds of jets that will get delivered to airlines once the grounding is lifted. New service announcements will drop rapid-fire once the MAX is cleared.

That likely won’t come before March, as regulators work to certify the plane is safe with Boeing’s proposed fixes. And it will take months to get the hundreds of mothballed planes airworthy and worked into airline schedules.

But it will be a new-route jackpot that travelers have never really seen before. Southwest, for example, will be adding more than 75 airplanes to its schedule. That’s like adding another small airline to U.S. competition. And you won’t have to fly a MAX to get cheap tickets, in case you’re apprehensive about trusting a plane that has had two fatal crashes and been grounded for nearly nine months. As those planes come into service, tickets on existing flights on those routes likely will drop.

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AirfareWatchdog's fare alerts include discounted promo-code fares as well as low fares on Southwest Airlines that other sites' alerts may not include. Personally, my favorite of the three types of fare alerts is the "Departure City alerts" because I want to know what surprise deals crop up from my home

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“It’s going to be really concentrated in certain airlines and certain markets, and that’s where you’ll end with the biggest impact,” says Patrick Surry, chief data scientist at Hopper.

How to find all those bargains? Check the news section of airline websites for announcements, or set up price alerts for particular markets that you are interested in through booking sites like Hopper or Kayak.

I looked at 20 different routes where airlines have recently announced service changes—two where flights were being discontinued and 18 where new service was announced. Once new flights are announced, airlines being selling tickets for them.

Discounter Norwegian announced nonstop service three days a week beginning May 6 between Paris and Austin, Texas. Two weeks before those flights begin, American’s cheapest price for a round trip from Austin to Paris with a connection was $831 when I did the price-checking Nov. 9. For a trip starting two weeks after the new flights begin, you could buy the Norwegian nonstop for $569 round trip.

Spirit announced daily service from Philadelphia to Cancún beginning March 1. The fare two weeks before: $542. And two weeks after: $442.

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It doesn’t always work. Of those 20 routes, 15 saw lower fares with more flights and higher fares when flights were pulled. In some markets, incumbents seem to ignore entrants like lesser-known carrier Sun Country and stick with similar pricing.

Sun Country announced flights on Mondays and Fridays between Dallas-Fort Worth and Puerto Vallarta, Mexico, starting June 5. Two weeks before, American’s flight for a four-day round trip was $785. Two weeks after, departing June 19 for that four-day trip, Sun Country’s price was $511 round trip, and American’s was $785.

Hopper’s Mr. Surry says prices typically do come down, but big airlines won’t match the price dollar-for-dollar. “Prices might drop 40% to 50%, but the major airlines only drop 15%,” he says.

My small survey found additional flights made only a small change if a discounter wasn’t involved. American Airlines is adding a second daily flight between Dallas-Fort Worth and Rome beginning July 2, for example. The two-week before-and-after test found fares only 9% lower after the second flight starts.

Mr. Surry says the deals depend not so much on the new entrant as on the incumbents. If there’s already heavy competition on a route, the price impact is smaller. One example: Spirit started flying between Nashville and Fort Lauderdale, but Southwest and JetBlue already fly that route. Prices didn’t change.

But when Spirit began flying between Austin, Texas, and Detroit, a route where Delta has a monopoly, fares dropped 30% with new competition.

Southwest’s Hawaiian push is affecting prices on many routes. Southwest flights between San Diego and Honolulu start April 20. Two weeks before, a round-trip ticket was priced recently at $733. Take that same trip two weeks after Southwest starts flying that route nonstop and the fare was $307, a 58% decline.

On the downside for travelers, after Alaska announced it would end nonstop flights In March between San Francisco and Kona, Hawaii, fares on United more than doubled. They jumped from $328 round trip to $748.

  How Sly Travelers Cut Their Airfares in Half © Paul Sancya / AP

How Sly Travelers Cut Their Airfares in Half .
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