Once-in-a-Lifetime Airfares: Will They Last?

March 18, 2009 — -- Nobody wants to pay retail. Not these days.

Just look at the Internet: People are Googling bargain-related terms like crazy. For instance, take the word "coupon" -- the use of that word alone zoomed to 19.9 million searches in the past year (and is probably why Spirit Airlines gave "coupon" such prominence in a recent airfare sale campaign).

Ah, sales. Spirit is not alone. Today, the airlines feature a seemingly never-ending cycle of sales that has "trained" us to expect bargains. And oh, how the airlines are paying for this.

But about those deals: Today's airfare sales are absolutely sizzling.

For more air travel news and insights, visit Rick's blog at farecompare.com

Case in point: Last week, several airlines dropped their prices below $500 for round trip flights to Moscow. No, not Moscow, Idaho -- I'm talking Russia. Then, American Airlines jumped in and suddenly, you could fly to Russia and back for $200.

One AA fare was round trip from Baltimore to Moscow for $205 -- and according to my weekend calculations, it was actually cheaper to fly to Moscow (from Baltimore) than round trip to Madison, Wis. Cheaper to fly to Moscow than to Monterey/Carmel, Calif. Cheaper to fly to Moscow than to Moline, Ill. -- wait, no, I spoke too soon: It cost a whopping $19 more to fly to Moscow than Moline -- sorry about that.

What's going on? More to the point, why? And what should you be doing?

First of all, you have to understand that this is an absolutely crazy airfare environment. The airlines are trying to fill up their planes but people are procrastinating -- while others just aren't flying. Meanwhile, an empty seat is worthless to an airline.

So, we get the yo-yo price game: when nobody's buying tickets, prices take a dive. When people start buying, prices creep up.

It wasn't supposed to work like this -- the airlines were trying to get away from "price is everything" with the introduction of "a la carte" pricing.