Price Wars Drive Coast-to-Coast Nonstop Airfares Lower
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What is the main topic discussed in this episode?
Here's your money briefing. I'm J.R. Whalen at The Wall Street Journal in New York. It's cheaper than ever to fly coast to coast in first class and in coach. We'll have the journal's middle seat columnist Scott McCartney on the line with some numbers in a moment. First, these money and market stories you should know. Higher tariffs on hundreds of billions of dollars worth of Chinese imports are scheduled to take effect on Friday, and that could mean higher prices in stores. Products whose prices would be directly impacted include electronic circuit boards, computer chips, chemicals, and other parts in business supplies. And there's an array of consumer products on that list as well, like grocery items, furniture, handbags, clothing, Christmas decorations, fire alarms, soap, lamps, and air conditioners.
Why are coast-to-coast airfares suddenly so low?
And the Wall Street Journal Real Estate Bureau addresses the topic of accounting for common charges when applying for a condo mortgage. The journal says that lenders have two considerations when a customer wants to borrow for a property with common charges. The first is whether the borrower will be able to make the monthly payments. The second is, in the event of a default, does the lender want to have the property, along with the common charges, on its books. And a few tips to prospective borrowers are to assess all the common charges ahead of time so there aren't surprises when signing the contract. Another is to ask a neighbor where they got their loan. And the third is to keep in mind that although sometimes common charges cover costs that would ordinarily be billed separately, like utilities, all common charges have the same impact on the debt-to-income ratio.
If you've been putting off visiting your old college roommate in Santa Monica or your aunt and uncle in New York, now's the time to plan a trip.
What short news items should travelers and buyers know first?
It's been a long time since flying coast to coast has been this inexpensive. And Wall Street Journal Middle Sea columnist Scott McCartney is on the line with some numbers.
How do higher tariffs on Chinese imports affect consumer prices?
So, Scott, these lower prices are primarily due to airlines having to lower prices to fill seats?
Well, that's right. There's been tremendous competition in these routes and a lot of some strategy shifts, some bigger planes coming in. The overall seat capacity in May, for example, was up almost 10 percent compared to the previous May. So with all that excess capacity, airlines are discounting seats. And we saw a real serious fare war in the first quarter of this year and coach tickets. That's moderated some as we get closer to summer, but still a lot of bargains and a lot of discounts in the premium cabins. Live flat business class seats between New York and Los Angeles going for $600 each way, $1,200 round trip.
That's pretty amazing. What kind of numbers are we talking about for first class?
Most of the first class offering on the Major trans-con routes are what we would equate to business class lie flat seats. So think of it more as business class than first class, although American does offer a first class seat. Those generally go, you can get the suite at different times for a 2000 or so. But the business class seats, I mean, I looked at dates in early May, right as we were putting together the story. So fairly close to booking and round trip price 1240 on United, 1217 on Delta. You can get Alaska first class seats, which are not the life flat bed, but still an excellent product, and they're selling that in June, peak travel time, $1,107.
These coast-to-coast routes are centerpieces for the airlines, and it's not just people going to visit their aunt and uncle, their old roommates. They are business clientele, people with some deep business expense account pockets, and there's also some potential there for future customer loyalty.
What airlines have found is that if they can win your loyalty on transcontinental routes, if you go a fair amount between New York and L.A., New York and San Francisco, Washington and LA, Seattle and New York, Boston, San Francisco, you name it. But if you're a regular on those routes and you develop loyalty to a particular airline, you're going to fly that airline to other routes.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:05–0:52
2
Why are coast-to-coast airfares suddenly so low?
0:52–1:59
3
What short news items should travelers and buyers know first?
1:59–2:08
4
How do higher tariffs on Chinese imports affect consumer prices?
2:08–5:16
5
What should condo buyers know about common charges and mortgages?
5:16–9:43
Speakers
2 identifiedMore from WSJ Your Money Briefing
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