Airline analysts don’t believe US carriers have much opportunity to grow their profits. They may not even be able to sustain their profits.
Latin America economies have been weak. Europe has had economic challenges, terror challenges, and entirely self-imposed challenges.
Sure, there’s the rise of the ultra low cost carrier but Spirit’s growth has moderated somewhat in key hub markets although Norwegian has been on a tear with low transatlantic fares.
Norwegian Boeing 787 Copyright william87 / 123RF Stock Photo
But deep discount transatlantic fares haven’t been limited to markets where there’s ultra low cost competition from Norwegian or from Wow Air.
And there have been great fare sales not just to Europe but also to Asia and the Pacific.
View of the Sydney Opera House from the Park Hyatt Sydney
There’s been too much airline expansion across many routes to be sure, but that also begs the question. It’s not like we’ve seen double digit growth between the US and very many markets. This suggests that air travel isn’t keeping up with modest growth. Low fuel prices allow airlines to drive down fares and still cover costs as they fill their planes. But what’s behind the need to fill planes, why aren’t they filling at fares more like we saw last year and the year before?
Here are 5 new deep discount international fare sales just today:
- Loyalty Traveler: Fare War Brewing? United/Star $495-$622 Los Angeles to 10 European countries then Delta joins in and so does American.
- Loyalty Traveler: United $432-$637 Chicago ORD to 18 European countries
- Airfare Spot: New York to Johannesburg, South Africa for $648 R/T [Star Alliance]
- Airfare Spot: Very low! Boston to Berlin, Hamburg, Stuttgart from $354 R/T [United]
- Airfare Spot: Very low! New York to Bali for $604 R/T
That’s fantastic for the consumer. Most of the deals have been to Europe, but we’ve seen Asia and Africa deals also.
The question is, are these fares being driven by specific competitive decisions from individual airlines? Are they being driven by sectoral shifts (airlines throwing capacity at markets and driving down price because of specific weakness elsewhere, or at least an inability to shift capacity out of these markets)? Or is there a broader, overall macroeconomic driver?
Do the fare sales we’re seeing today presage economic challenges going forward?
Yes , terrorism
Going to Melbourne on United from Atlanta $572 RT. Great fare.
Let’s see some great biz or first class sales and i’ll be all over it!!
Maybe it is Karma. The major US Airlines are kicking loyal customers to the side in the midst of an international price war. What could possible go wrong with that strategy?
Still waiting for business class fare sales, but the coach prices are really not bad.
During this price war I’m giving my biz to the international carriers not that the U.S. carriers that have shown absolutely no loyalty to their best and most loyal customers.
Hopefully this trend will expand to discounts on award seats. If they have lots of seats and lots of miles awarded to to get rid of, why not?
I am holding my breath waiting for a reduced American Airlines business class award reduction for Sydney to Los Angeles.
As PT Barnum so wryly put it, “There’s a sucker born every minute”.
There is zero competition for airlines or just about anything else in the US these days.
The very fact you use the word “consumer” is an indication of your true mental philosophy. One where there’s a corporate structure in power and a lowly consumer of their goods. No need to sell your services. Plenty of ants to consume it. Use it up. Use you for all you’re worth.
This rotten ideology has been dominant since well the early 90’s . I can’t imagine what Political movement could have started such nonsense.
Better to be a “client” than a consumer.
@Charlie
–Charlie Chang sounds an awful lot like Charlie Chan, which engenders multiple negative Chinese stereotypes. Not amused.
–If you were thinking that the 1980s were a period of kumbaya, you obviously were not paying attention. The Cold War was on, Drexel Burnham Lambert invented leverage buyouts, the Savings and Loan industry was bankrupt….
–Are you trying to blame the Republicans or the Democrats for the current situation? Bill Clinton was President throughout most of the 1990s and last time I checked, he was a Democrat.
–Either way, Republicans, Democrats, Clinton 2 supporters, and Trump supporters all like to travel and read this blog. Please keep to the topic.
Yes, business and first would be welcome……….
Or, if I could just get to Maputo for that positioning flight.
@Balanced
It’s Charlie Change, not Charlie Chang. About CHANGE, nothing to do with ethnicity. @Balanced, looks like u could use a little balance in your life.
People maybe think that these low fares might be a leading indicator. When I see very low prices, as I did earlier this year for both Paris and Instanbul, I thought, “The market is predicting another deadly attack.” And I didn’t buy a ticket. In days gone by, I would have purchased and traveled without a thought. I don’t know how sophisticated the average leisure traveler is. But I think the constant drumbeat of mass shootings and disease hysteria (Ebola and Zika) has made leisure travel very unattractive to many people.
@Steve, how did you pull up that $572 flight from ATL to Melbourne??