To Compete and Thrive, Airlines are Cutting Fares


The airline industry is changing. This is well known. I mean, do you remember how much it used to cost to fly across the country?

These days, flight prices are at an all time low, with some flights less than 50% of what they were a few years ago. And not just for one-time deals that come and go in the blink of an eye. Rather, airlines are cutting prices permanently and offering cheaper flights as a way to compete with each other.

Airlines have been consolidating or going out of business over the last few years so that now there are only 4 major US airliners: American Airlines Group Inc., United Continental Holdings Inc., Delta Air Lines Inc. and Southwest Airlines Co. (1) With fewer competitors, airlines had less incentive to cut prices, until recently when fares started dropping again.

This change has been especially harsh on smaller airlines who struggle to compete with bigger ones on price. For example, Spirit Airlines, which was founded in 1980 and has been growing steadily for decades, recently saw its share price drop by nearly half from $73 per share in March 2014 to $40 per share in March 2015 (2). In fact, even as the overall economy improved over these past few years, most airlines’ stock

Airlines have made progress in reducing the most annoying expenses, such as flight change fees. Now they are turning their attention to the biggest cost of all: jet fuel.

Airlines are now under pressure to cut fares as well. In the past few weeks, shares of airlines have plunged at least 20 percent because of rising oil prices, according to Bloomberg News.

Bargains can be had on flights across the country and around the world, but you have to know where and when to look. Here are some strategies that could help you buy a ticket for less than what you would pay for a tank of gas.

Watch Fuel Prices: If you think that a $200 round-trip domestic ticket seems like a bargain, keep in mind that it is about 25 percent higher than it was a year ago, adjusted for inflation, according to data from Airlines Reporting Corporation. But fares could fall if oil prices stay high, said Rick Seaney, chief executive of FareCompare, which tracks airfare trends.

Airlines are locked in price wars in some markets because of the rise in fuel costs. “The airlines don’t want passengers to think they can always get lower fares next week,” Mr. Seaney said.

Flights have been getting cheaper in recent years, more so than ever before. The airlines are competing to take customers, and a few low cost companies like Spirit Airlines have even been taking the old school carriers on.

This year alone, the US airlines have cut back their fares by nearly 5%, which is more than they have cut back in past years. This is leading to a very interesting situation for travelers as you can now get low fares from almost any carrier.

This blog post was created with the help of our team at Skyscanner who helped us put together some of the best tips for finding cheap flights. We hope that this will be useful to you, and if you have any questions please feel free to ask!

Here is a list of some of the things that you should know about finding cheap flights:

Airlines are becoming increasingly competitive and innovative when it comes to designing strategies that attract customers. In the latest move, airlines such as IndiGo, Jet Airways and SpiceJet have announced a slew of discounted fares for both domestic and international flights. The latest offers come in the wake of a number of promotional schemes in recent months by airlines during the lean travel season.

IndiGo is offering a discount on one-way fares from the metros to anywhere in its network starting at Rs1,999. Jet Airways has come out with a discounted fare structure under which passengers can book a domestic ticket for Rs2,222 and an international one for Rs5,555. SpiceJet has announced an open house sale offer under which passengers can buy tickets at fares starting at Rs2,200 and Rs8,500 for domestic and international flights respectively.

By announcing hefty discounts on airfares over the last few months, Indian carriers have been trying to boost passenger traffic during this lean season. The move comes after a slowdown in passenger traffic growth in the recent past due to high airfares following the rise in fuel prices earlier this year.

According to data from aviation regulator Directorate General of Civil Aviation (DGCA), domestic passenger traffic grew 14% in November 2017

Airlines are competing very hard to get the market share that they want. They are offering lower fares and better services than before. The airline industry is a huge business globally and has changed significantly in the last 10 years.

Industry structure is changing as well. There are mergers, consolidation, and alliances. The industry has also gone global. Airlines are setting up partnerships with other airlines to capture and keep customers.

There have been many changes in the technologies used by airlines to book tickets and track travelers’ information. Since 9-11, security has become a very important topic in the industry as well.

Airlines are trying to offer more benefits to frequent flyers and improve services for all customers. These include online check-in options, online reservations available 24 hours a day, connecting flights with other airlines, new meal options on flights, easy booking of travel packages including hotel reservations and car rentals. Airlines are improving their service standards and marketing campaigns to increase their share of the market.

As new applicants for airline service, we are betting on a fundamental change in the structure of the airline industry. It is our belief that the airlines’ long-term ability to compete in the marketplace will be determined by their willingness to embrace this change and adapt to it.

The conventional wisdom appears to hold that air fares will have to rise as demand continues to rise and capacity remains constrained. We believe that some or all of the fare increases will be offset by technological improvements in the way airlines sell seats. As customers, we have already seen how technology has improved our access to information about available flights and flight prices. This has made it easier for us as consumers to comparison shop for tickets and has put downward pressure on fares as airlines compete for customers. And clearly, there are significant additional gains that can be realized with further improvements in technology.

We believe that these improvements will be driven by the increasing use of computers to manage reservations systems at all levels – from individual travel agencies and corporate travel departments, to global distribution systems (GDS) and airline reservation systems.


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