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.
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.
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?