U.S. airlines' financial problems have spawned a flurry of fare cuts on some domestic routes which, at least for the moment, means money-saving bargains for alert vacation travelers.
Battered by higher operating costs, a drop in passengers caused by economic conditions, and deregulation-spurred competition, the airlines have resorted to what looks like a price war in some cases in an effort to fill those empty seats. They have been offering new low rates from the Washington area to popular destinations like California and Florida. Restrictions are often non-existent or minimal.
Most lines advertise their wares widely and heavily; others, like the small, barely 1-year-old People Express, don't--yet People now has the lowest fare to South Florida ($75 one-way, Monday through Friday, from Baltimore-Washington International Airport to Sarasota and West Palm Beach). Major carriers fighting for business and profit on Florida routes recently raised their "low-low" sunshine fares after apparently deciding the head-to-head pricing battle was becoming self-destructive.
Regardless of your destination, due to unstable market conditions it is important to keep abreast of changes. Recently, within a few days, a West Coast fare had changed three times as airlines struggled to meet the competition while trying to avoid worsening their revenue picture by being stuck with an unfeasibly low fare.
On the international scene, U.S. and foreign flag carriers have reached an agreement on North Atlantic fares. A few fares have been lowered and others reflect slightly higher rates, but in some cases the increases will be significant--which may discourage overseas travelers and thus not help the lines to cut mounting losses. The percentage of increase varies according to the area and type of service, with some new fares already in effect in several European markets; others were still awaiting approval by the governments involved. Most should be in effect by April 1.
While consumers are obviously rejoicing to see certain U.S. fares go down, and some blame the major airlines for becoming complacent over the years when regulation limited price competition, others worry about the economic situation's effect on what has been regarded as the finest airline system in the world.
Jack Yohe, formerly a CAB consumer advocate and now an aviation consultant, discussed the subject in a recent speech, which was quoted by Travel Weekly, an industry publication:
"I am not against discount fares. But the recent rash of low-ball fares is lunacy. It hurts everyone--the consumer in the long run, the medium-size airports that don't have these fares, and of course the carriers, some of whom already have reached the stage where they are borrowing money in order to pay interest."
But as one realistic airline official put it, "People are still going to look for the cheapest fare."