How Sly Travelers Cut Their Airfares in Half
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What is the main topic discussed in this episode?
Here's your Money Briefing for Thursday, December 5th. I'm J.R. Whelan at The Wall Street Journal in New York. Airlines adding more routes to their schedules not only means more convenience, but there can also be a financial perk for passengers. Wall Street Journal Middle Sea columnist Scott McCartney will be with us to explain. First, some money and market news you should know. There are jobs to be had in the health care, finance, agriculture, and construction sectors. The Institute for Supply Management said its non-manufacturing index, which tracks those industries, shows that demand for goods was high and companies have ramped up hiring. The U.S. services sector grew at a solid pace in November.
That's despite the fact that the trade war between the U.S.
How do new airline routes lead to cheaper airfares?
and China has remained a key restraint on both the manufacturing and service sectors.
They say imitation is the sincerest form of flattery. In the world of airfares, imitation can result in the sincerest form of scoring major deals. And Wall Street Journal Middle Sea columnist Scott McCartney is on the line with us to explain. So, Scott, this comes down to competitors adding routes that are already flown by other airlines?
It's really about airlines adding capacity, adding new flights on certain routes. And it kind of works whether there's existing nonstop service there or whether the existing competition would be connecting flights. But it's really a basic supply and demand issue. When you announce a new route, You have a whole lot of flights in the system with absolutely no bookings.
What supply-and-demand mechanics cause fares to drop when airlines add capacity?
And so airlines typically will come in and cut fares dramatically in the marketplace. And so when I looked at 20 different recent fare announcements, and in most of them, fares went down dramatically. In a few where airlines actually pulled out flights, fares went up dramatically. And the changes you see are in the 50%, 60% range. So it's really a unique opportunity that you don't normally see. Airlines don't run a whole lot of sales anymore. And if they do, it's 10%, 20% off. But these are the situations where you can find the really incredible deals, 50%, 60% savings from what you would have paid even a couple of days before the new flights begin.
Yeah, that's a substantial change in price.
How big are the typical fare reductions after a new route announcement?
How can travelers find out if and when airlines plan to add routes or add capacity?
So there are a couple of ways. One is if you have a preferred airline, you just watch their website for announcements. You know, airlines love to get the word out about their new flights because they need those bookings. And another is you can with services like booking services like Hopper, which is an app kayak website, you can sign up for alerts in in a specific market. And so when there is a new service announcement and those fares do drop dramatically, you can get an alert saying, hey, you know, you want to go to Cancun and from Philadelphia. And all of a sudden there's there's a whole lot of cheap fares in that marketplace that you can jump on.
Could travelers then squeeze more savings out if they choose, let's say, connecting flights rather than flying direct?
You know, this is a case where you really can't. It's the direct flight. It's the new flight that really offers the savings. And, you know, they're typically not the trunk routes into hubs where airlines already have plenty of service. Now, this may be out of a hub to a leisure destination to, you know, place that, you know, Delta is adding Seattle to Tampa, you know, United's adding Los Angeles to Anchorage, things like that.
How can travelers track upcoming route additions and get fare alerts?
Southwest is adding a lot of flights, Spirit, some of the discounters, which is one reason why you see substantial savings. Even when the discounter comes into the market, the incumbent may match prices or at least significantly reduce their own prices because there are more And it even works with American next summer on the 2nd of July. They're adding a second flight each day from Dallas to Rome. Well, they've got more seats to fill. So guess what? If you look two weeks before that second flight comes in, the fare is $150 higher than if you look two weeks after.
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Chapters
8 chapters
1
What is the main topic discussed in this episode?
0:05–0:46
2
How do new airline routes lead to cheaper airfares?
0:46–1:42
3
What supply-and-demand mechanics cause fares to drop when airlines add capacity?
1:42–2:32
4
How big are the typical fare reductions after a new route announcement?
2:32–3:58
5
How can travelers track upcoming route additions and get fare alerts?
3:58–5:17
6
Do connecting flights ever beat new nonstop-route discounts?
5:17–6:28
7
How will the Boeing 737 MAX return affect route expansion and ticket prices?
6:28–7:06
8
What practical tips should travelers use to score these route-driven deals?
7:06–7:13
Speakers
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