Airlines, faced with the challenge of filling a record 260 million seats this quarter, are rolling out fares so low they rival the cost of a pair of movie tickets. Southwest Airlines, as a prime example, offered one-way fares as low as $29 for early morning or night flights. This wave of discounts is not just a Southwest phenomenon but a wider industry trend, driven by the need to occupy an increased number of seats.
The shift back to traditional booking patterns by leisure travelers after the pandemic’s erratic demand has left airlines seeking new ways to attract customers during non-peak periods. Scott Keyes, founder of Scott’s Cheap Flights (now Going), notes that airlines are either dropping or not significantly raising last-minute fares, a notable deviation from the norm. This year’s fourth quarter sees a nearly 8% increase in scheduled seats for domestic flights, with a corresponding 6% rise in flights, according to Cirium, an aviation-data firm.
Despite this increase in capacity, major airlines reported record revenue and strong demand in the more profitable second and third quarters. Even with a 13% drop in airfares compared to last year, as per the U.S. inflation report for September, airlines like JetBlue, Spirit, and Frontier reported significant fare reductions and, in some cases, anticipate losses for the last quarter.
To adapt, airlines are recalibrating their strategies. Southwest plans to moderate its growth to better match demand, while Frontier Airlines is seeking less crowded markets for its flights. Despite the lure of low fares, high demand is expected during peak holiday periods, with major airlines like Delta, United, and American predicting record or near-record passenger numbers.
As airlines prepare their 2024 schedules, they face the challenge of balancing increased operational costs with the need to fill seats. While promotional fares may continue, the industry is expected to stabilize fares next year. This presents an opportunity for travelers to take advantage of these unprecedented low fares while they last, a rare silver lining in the current economic landscape.
