Fares at $99, Airlines Doing Fine

Jan. 7, 2009 — -- When was the last time you flew across the country for $99?

Thanks to the current crop of incredible airfare sales, you can do that now -- on Southwest, for example -- and other airlines, such as JetBlue are advertising shorter hops, starting at just $39.

And the legacy carriers have plenty of bargains, as well. So the airlines must be desperate, right? I can hear you thinking: the airlines are in big, big trouble!

Well, no. Not really. Sure, the economy's tanking, and people are losing their jobs and houses are losing their value and … well, I don't have to tell you any of this, we're all living it.

And in the travel and tourism sector, we're seeing the same thing: notice how you can get a room in a "name" hotel in Las Vegas this month for $33 a night? But when it comes to the airlines -- they're actually doing OK.

For more travel news and insights visit Rick's blog at: http://farecompare.com.

How do I know? I'm a student of history. Let's go back to January of a year ago, and -- what do you know -- there were tons of airfare sales back then too, at least 18 by my count. In fact, I checked FareCompare's historical data for the cheapest airfares in January the past four years, and here's what I found:

Average cheapest round-trip airfare between the top 50 U.S. cities each day in January ranged from:

Jan. 2005 -- $205 to $240

Jan. 2006 -- $235 to $255

Jan. 2007 -- $220 to $245

Jan. 2008 -- $240 to $260

So far this January, the price is hovering right around $250, so not much has changed since last year, except that the price of jet fuel is down, about a buck-and-a-half less per gallon this year, so that's a win for the airlines.

Plus, there were no bag fees last year at the same time. But today, check a bag and you've just added $30 to your round-trip flight, or $80 if you check two. The airlines score again.

Business travelers are still getting roasted over the coals. At least that's how many feel, with higher prices and more onerous "rules" like the Saturday night stay-over, which made a comeback over the past year.

January is traditionally the busy month for road warriors. I was just looking at fares from Dallas to New York to book a quick business trip for myself, and it wasn't pretty: flights departing Jan. 21 and returning Jan. 23 -- that's a Wednesday and Friday -- were going to cost me at least $710 nonstop.

However, if I stayed over into Sunday, I'd lower my flight cost to $310 … but who wants to do that? Especially if you have to factor in the cost of a New York City hotel room!

Airlines, 1. Business travelers, 0.

Ah, but will business travelers continue to fly? That is the question, and there are already signs that market is softening. Or, just as bad from the airlines' perspective, are business travelers being forced to give up business class seats on international flights? Again, there are signs of this, and a lot of anecdotal evidence.

When the airfare sales are over, will passengers -- both business travelers and others -- start staying away?

Right now, the answer isn't all that clear. According to Hitwise, which maintains data about the online activity of 10 million U.S. consumers, traffic to nearly 1,000 travel shopping agency sites (not airlines) during the first week of this year was about the same as the first week of last year. And it's the same story when it comes to commercial aviation reservation Web sites.

We'll just have to wait and see, really. But me, I'm optimistic.

We have a new president coming in, bringing along a lot of high expectations and a motivated domestic sector. Hey, we might even see some movement on the long-delayed and sorely compromised infrastructure front. Maybe an injection of cash, and more importantly, jobs.

And who knows -- if fuel prices cooperate, the time might be ripe for a few more newcomers into the ranks of the airlines, which would be nice, considering how many we lost last year.

So, yes, I'm optimistic. Why not? It's a new year, and it started off in a nice old-fashioned way: with $99 flights from coast-to-coast.

This work is the opinion of the columnist and in no way reflects the opinion of ABC News.

Rick Seaney is one of the country's leading experts on airfare, giving interviews and analysis to news organizations, including ABC News, The New York Times, The Wall Street Journal, Reuters, The Associated Press and Bloomberg. His Web site FareCompare.com offers consumers free, new-generation software, combined with expert insider tips to find the best airline ticket deal.