Nov 13 2008
When Airlines Drag Feet On Fare Sales
It seems to me that the airlines aren’t very smart. But I really want your input on this. Here’s what I’m thinking.
1. Transpacific.
In spite of huge capacity reductions over the past few months, the carriers flying between the mainland and Hawaii have had too few seats occupied. This was inevitable. To avoid empty seats, either they would have had to further reduce their capacity or lower the sky-high prices starting just before Labor Day. They were uniformly reluctant to do either, however.
Finally all heck broke lose, and, as a result, we are now seeing some of the best Hawaii airfare deals in years. A prime example is the fare of $100 each way between California and Hawaii.
Here are my questions:
- Why did the airlines wait so long to reduce Hawaii airfares?
- Would they not have been better served to offer a lessor reduction in fares and not wait until they got to the point that such deep and unprofitable competition and discounting became necessary?
- Would any of it have made a difference given the economy?
2. Inter-island.
Mokulele Airlines is scheduled to start flying next week between Honolulu, Kona and Lihue. There exists, however, too much capacity in the Hawaii inter-island market for Hawaiian, Go! and Mokulele. At least at the current ticket price levels.
Between Hawaiian and Mokulele, a total of 8 additional jets are being added for inter-island flights over the next few months. The airlines will once again have to either reduce capacity or lower prices. Yet all three competitors are waiting and doing nothing about it.
Based on what has just happened in the trans-Pacific market, it seems likely that we will soon see $29 (or lower) inter-island airfares again. That in spite of Mokulele’s insistence that they will not participate in a cutthroat fare war.
- Would it not have been more productive to start to introduce $49 airfares in an attempt to lure more passengers into the marketplace?
- How does the additional capacity help the airlines if it can’t be offered at a price level that simultaneously increases passenger load?
I’m trying to make sense of this. If you have any thoughts or comments, please share them.
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Jeff,
Enjoy the website, thank you. My question, we are taking my parents to Hawaii for their 60th anniversary in late July ‘09, when do you think air fare will drop for that time frame? Should we be buying airfare now or wait until after the first of the year? there will be 8 traveling from Calif.
Thanks for your thoughts.
Tom
Hi Tom,
Thank you for your comment and question.
July is traditionally peak season for Hawaii, which translates to highest prices. Also, next summer appears like the first time tourism “might” be back to normal. Therefore, if it were me, I’d buy as soon as possible, at the sign of any weakness.
We typically see July airfares from California to in the $700 range. When I just looked however, I saw a few dates from LAX at about $500, which is really good, and something I’d book without hesitation or waiting.
Where are you traveling from and what have you found?
Aloha, Jeff
Jeff,
These airlines just don’t have a clue. AA with it’s large share in DFW have still kept prices high to Maui. They can’t use the high price of oil as an excuse anymore but still have kept prices high in some markets.
At least the hotels have started to understand. You have done a great job of showing us good pricing in places in Maui. Sadly I don’t see things getting any better anytime soon for the consumer and the airlines better adjust.
Jeff, I have several family members and friends who wanted to come for a visit in Hawaii this Christmas. At times when the fares were well into the discounted time frames, we have been waiting and waiting.
I agree with Bill above, who comments that he doesn’t see things getting better any soon.
Jeff,
Thank you for the information. We are hopeing to fly out of Fresno. The best price to date is $811. I’ll continue to monitor.
Thank you again for the input and keep up the great website. I’ll be looking for travel information as time goes on.
Tom
Hi Tom,
Another idea: Could you make it 10 instead of 8? Airlines usually give special pricing at 10. On the other hand, I’d check with each carrier directly on this, by following up with their group travel desk (not the normal res. people). This is a time for negotiation, so 8 might be enough for them to do better. Give it a try, and I’d suggest doing so as soon as you have a chance. Let me know what happens okay.
Best,
Jeff
For example, here’s the link to Delta’s group desk: http://tinyurl.com/66vf89