Will yesterday’s tragic crash of American Airlines Flight 587 in Queens, New York, translate into lower airfares?
It’s an opportunistic, if not offensive question, to be sure. But for business travelers who are watching the bottom line, it’s one that must be asked.
After the Sept. 11 terrorist attacks, airlines aggressively reduced fares in an effort to lure travelers back. Practically every major carrier pared prices, lifted restrictions and offered mileage incentives in an effort to fill planes. United Airlines, for example, cut its business fares in half and loosened some ticket restrictions. Delta Air Lines reduced its leisure travel fares and offered a 10 percent discount for travelers who booked online. Several airlines also held one-day fare sales.
The average airfare in the United States dropped by 18.7 percent to $118.54 in September, according to the Air Transport Association (ATA), a trade group representing the airline industry. Coach class fares sank by 19 percent and first-class fares dropped 15.5 percent, ATA said.
“I think there’s a good chance that fares will go down again,” says Bob Harrell, an airfare analyst based in New York. “Monday’s crash is definitely going to make the traveling public nervous again. There will be cancellations – and more seats will need to be filled.”
Harrell estimates that leisure travel airfares could fall by an additional 20 percent as soon as next week. Business travel fares could dip, too, although airlines are far likelier to eliminate restrictions, such as Saturday-night stayover requirements, rather than reduce prices. The sales will last “until the airlines have sold enough seats,” he predicts.
What does this mean to you? If you can, wait to buy your airline ticket.
If past behavior is any indicator of how the airlines will respond to yesterday’s events, then expect little if any initial reaction from the air carriers. They’re waiting to see what passengers do. Are leisure travelers going to cancel their vacations and stay home? Are businesses going to order their employees to stay off the road, as Hewlett-Packard and Gillette did after Sept. 11?
The airlines had other reasons for holding back on offering fare discounts in September. Reducing prices immediately after Congress approves a $15 billion bailout is an odd way to show your gratitude for government help, so the industry waited a few weeks before slashing fares.
This time there’s no compelling reason for the airlines to wait as long. The first signs of a fare cutback could come by this time next week, if the experts are to be believed. Like most sales in this industry, they’re probably going to be a lot like shark feedings. All it will take is for one carrier to draw metaphorical blood by announcing a sale, and suddenly its competitors will match the cuts in a frenzy of “me-too” reductions.
Remember, the next fare war is dependent on a number of factors. First, enough air travelers have to delay or cancel their plans, leaving planes to fly half-empty. Never mind that there’s little reason to stop flying, at least when it comes to airline safety. Early indications are that this crash wasn’t related to the terrorist attacks of two months ago. In fact, this is just the 12th American Airlines incident with passenger fatalities, according to the Web site Airsafe.com. It is only the ninth fatal incident involving an Airbus A300.
Second, enough air travelers must delay their bookings, which would be cause for considerable concern among carriers that already face an uncertain future. Finally, it takes one particularly desperate airline to begin cutting fares. Pretty soon you have a full-fledged fare sale.
If all of those things happen, then the average price of a leisure ticket could be reduced up to 40 percent from a year ago. Under any other circumstance, that would be a reason to celebrate. At a time like this, though, it’s just another sad opportunity to save.
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