Airfare Hikes, Dirt Cheap Prices
Airfare is high, but better days are coming.
Aug. 10, 2012— -- It's been quite an eventful few weeks in the world of air travel.
A Delta plane was delayed because a swarm of bees attached itself to a wing; a Spirit passenger was kicked off a flight, not because his pants were sagging below his rear but because he allegedly threatened to smack the crew member who pointed this out; and some sort of bird hit a United plane so hard it left a huge gaping hole in the aircraft's nose.
We also had another couple of airfare hike attempts. One was successful, which means your ticket will cost you more. Or will it?
For more travelnews and insights view Rick's blog at farecompare.com
Back on July 20, United Airlines decided to raise its prices by as much as ten bucks (shorter routes got a lesser hike). The hike was deemed a success, which occurs when most of the other airlines join in and raise their prices, too. If that doesn't happen, the hike-initiating airline gives up and drops the increase for the simple reason that no airline can afford to be even a single dollar more than the competition. If a carrier's prices are so much as a buck higher than the others, that airline winds up on page 10 of airfare search sites and nobody will ever find it.
Then, just last week, United did it again; it launched yet another $10 hike. This time though, it didn't "stick" as I like to say. It looked promising at the start - well, promising from an airline's point of view - because American and Delta quickly increased their fares, too. Then it became clear that both Southwest and JetBlue declined to participate and when those two power houses sit out a hike on the sidelines, you know it isn't going anywhere.
But they will try again. If not United, some other airline will carry the ball. So what's a flyer to do?
Shop smart - and you long-time readers will know that means shop Tuesday afternoons around 3 p.m. eastern. That's what one of my employees did just this week and found flights from greater Los Angeles to Las Vegas for $39 one-way. "Just like the good old days," she chortled. Maybe you won't find fares that cheap but hang onto your hats because starting right around Aug. 21, ticket prices are taking a dive. Buy now, travel later and you'll save as much as 10 to 20 percent on airfare.
It's an annual occurrence, paired to the end of the busy summer season because once the kids go back to school, demand drops sharply and so do prices. Most of that 10-20 percent drop in prices comes as airlines shed their 'peak travel' surcharges, sort of a vacation fee that gets rolled into all tickets at the start of each summer.
Bottom line: that single $10 price hike of United's that everyone else joined in on (well, most of them) isn't going to be a deal-breaker if you were planning to head to Boston for a fall foliage tour.
What could be a deal breaker is if the rest of the year is anything like 2011. Back this time last year, the airlines were poised to spring another seven airfare hike attempts on unsuspecting passengers. True, only one of those tries was a success, but there were a total of 22 attempts for the entire year with enough successful hikes to add an additional $130 to some tickets. But it's not time to worry yet.
That's because airlines don't launch hikes just to make money. Sure, that's the main reason, but it's also a very simple strategy to gauge passenger appetite for hikes. Appetite - makes it sound like someone salivating over a sundae - so maybe I should use the word acceptance instead. Either way, it means the willingness to pay a high price if required. Appetite/acceptance is easy enough for an airline to judge after a hike: either bookings continue as normal or a significant number of people quit buying tickets. When the latter happens, watch hikes disappear.
Passengers have real power over the air travel industry by the mere act of staying home (or getting behind the wheel). Airlines don't make money if you don't fly so let them know how you feel with your wallet. And just so you know, I am not anti-airline; I think most of them do a very good job in an extremely difficult sector made ever more crazy thanks to the constantly see-sawing price of oil.
Running an airline can be a lousy business, whether because of belligerent bees or budget-busting price hikes. But hang on, passengers - cheaper days are coming.
The opinions expressed by Rick Seaney are his alone and not those of ABC News.
