Travel tradeoffs: as air fares soar, so do 'discount' deals
Some good news for summer vacationers: While regular airline fares will go up 5.4 percent May 1, discount airline fares will be more plentiful than ever, according to the Civil Aeronautics Board (CAB).
Already, "the volume of traffic moving on discount fares is up at least 5 to 10 percent" from a year ago, says Julien Schrenk, a domestic fare specialist with the CAB.
Cut-rate fares and some out-and-out price wars along heavily traveled routes "might appear as a paradox" at a time when some of the nation's major domestic airlines are losing economic altitude because of higher fuel costs and a decline in overall business, the air-fare specialist notes.
But the answer is simple, he and other airline industry experts say: While higher fuel costs have helped push the regular first-class and coach fares up dramatically -- nearly 26 percent from May to December of 1979, and the latest boost taking effect in May -- discounts are booming as airlines try to sell every available seat to make the best profit possible.
This, coupled with the fact that there are "literally dozens of new airlines in the skies since the Airline Deregulation Act of 1978," will mean big potential savings for air travelers this spring and summer, Mr. Schrenk says.
"We're really on a two-tier pricing system," Mr. Schrenk elaborated. "One indication of this is that the average fare per mile has not gone up as rapidly as the standard [nondiscount] industry fare, which indicates a greater use of discount fares."
On March 26, Trans World Airlines started offering a special promotional fare of $390 round-trip from New York to Los Angeles, substantially down from its regular fare of $650 for the same two-way flight. And if you book seven days in advance and "stay over through a Saturday," the round-trip TWA fare is $298, substantially cheaper even than the "regular" fare on board one of the new airlines which has established service on this route since airline deregulation.
For the new air carriers which have come on line since 1978, setting fares involves less discounting than just establishing lower fares in the first place. For instance, the round-trip airfare from these two cities on World Airways is $ 360, with no discount.
"The general economy is such that department stores have had to have sales to get the business and so have we," says Daniel Hankin, vice-president of the Air Transportation Association (ATA), a trade organization which represents most of the major carriers. "It's good news for the consumer, and, of course, its purpose is to fill seats."
Another airline executive, who did not want his name mentioned, said the current "high level of discounts will continue through the summer," and there could even be an increase in discounts.
In what may be the ultimate come-on for tickets, United Airlines on April 1 started a give-away game in which one out of every 325 passengers, and one out of every 325 people who just write in for the game, win one free round-trip ticket anywhere United flies. Both American airlines and Trans World Airlines followed United's lead and began a similar game April 10.
The games work like other legal betting games, with the card holder having to scratch a card with a coin and if he or she gets "three airplanes in a row," there's a win.
United, according to Charles Novak, the airline's director of communication, expects to give away about 13,000 winning cards aboard the planes and another 6, 000 just through the mail. As with other gimmicks, this game is being employed to spur the lagging traffic market, Mr. Novak stated.