Airline Prices/Discounts

[frugaltravel]

Fortunately, or not, we live in a country where the government collects a lot of data. Using information for the first quarter of 2010 from the Office of Aviation Analysis from the US Department of Transportation (see Table 1), in the top 43 airline O/D markets in the US, Southwest Airlines had the lowest average fare in 10 of those or about 24% of the time. You can decide whether they are large or small markets. They consist of:

 

 

• Dallas-Houston
  
• Dallas-Phoenix
  
• Chicago-Phoenix
  
• Chicago-Los Angeles
  
• Chicago-Las Vegas
  
• Chicago-Washington
  
• Chicago-Minneapolis
  
• Denver-Las Vegas
  
• Denver-Los Angeles
  
• Chicago-Dallas
  

 

Honestly it is not me you need to convince. Another poster consistently insists Southwest is rarely the lowest (my comments have always been with smilies). I guess if you say it enough, it has to be true, regardless of the hard, cold facts you have posted. I am sure there will be an excuse for the inaccuracy of the data that you posted.

[greatam]

Fortunately, or not, we live in a country where the government collects a lot of data. Using information for the first quarter of 2010 from the Office of Aviation Analysis from the US Department of Transportation (see Table 1), in the top 43 airline O/D markets in the US, Southwest Airlines had the lowest average fare in 10 of those or about 24% of the time. You can decide whether they are large or small markets. They consist of:

 

 

• Dallas-Houston
  
• Dallas-Phoenix
  
• Chicago-Phoenix
  
• Chicago-Los Angeles
  
• Chicago-Las Vegas
  
• Chicago-Washington
  
• Chicago-Minneapolis
  
• Denver-Las Vegas
  
• Denver-Los Angeles
  
• Chicago-Dallas
  

 

You really need to drill down a little further to see how they compute the data. They compute low fare average using THIS method: "Average fares are average prices paid by all fare paying passengers. They therefore cover first class fares paid to carriers offering such service but do not cover free tickets, such as those awarded by carriers offering frequent flyer programs."

 

Darn sight different in price and certainly skews the "average low price" when you compare an AA/UA/US 1st class fare from Chicago to Phoenix. Almost a $200 difference on a one way even using WN's Business Select pricing (picked 2 arbitrary dates in November and January, NOT close to any holidays or prime travel periods). Just from my small example, not even close to a fair comparison, as WN has no first class seating, service or fares. Leave it to our government to combine apples and oranges and come up with bad data.

 

It truly is amazing even using this skewed data collection method, that out of major hubs-Charlotte, Atlanta, Dallas, Houston, etc.etc, the legacy carriers, who do offer and sell true first class, still consistently offer the cheapest fares on a majority of routes.

[Globaliser]

I don't have access to the data that greatam has, but I can recognise some potentially dodgy use of statistics. I'm not saying that parody's propositions are wrong - only that these are not good statistics for using to try to establish those propositions.

If you are still unsure of this fact, go to http://farereport.com/ and put in Providence to Baltimore as on O/D pair. You will find that Southwest has 99% of the market and the lowest average fares. This is based on hard data -- not someones unsupported supposition.

If Southwest has 99% or 100% of a market (and the Office of Aviation Analysis reports have 100% market shares for Southwest on some routes), then "lowest average fare" is meaningless. The carrier that has 100% of the market, or anything like that, simultaneously has both the lowest average fare and the highest average fare - because its average fare is the only average fare in that market. So this is a meaningless example.

 

Moving on to something less meaningless:-

Using information for the first quarter of 2010 from the Office of Aviation Analysis from the US Department of Transportation (see Table 1), in the top 43 airline O/D markets in the US, Southwest Airlines had the lowest average fare in 10 of those or about 24% of the time. You can decide whether they are large or small markets. They consist of:

• Dallas-Houston
  
• Dallas-Phoenix
  
• Chicago-Phoenix
  
• Chicago-Los Angeles
  
• Chicago-Las Vegas
  
• Chicago-Washington
  
• Chicago-Minneapolis
  
• Denver-Las Vegas
  
• Denver-Los Angeles
  
• Chicago-Dallas
  

In all of these markets, it is possible to buy first class fares (but I suspect that there is little three-class service in these markets).

 

The Office of Aviation Analysis itself warns about the effect of this:-

Average fares are average prices paid by all fare paying passengers. They therefore cover first class fares paid to carriers offering such service but do not cover free tickets, such as those awarded by carriers offering frequent flyer programs.

But Southwest has no first class, so by definition does not sell first class fares. The comparison therefore loses a bit of meaning, because in markets where Southwest operates and is being compared to two-class airlines, like is not being compared with like (average "other airline" fares including first class fares compared to average Southwest fares excluding first class fares).

 

The truly comparable statistic would be to compare the average economy class fares across airlines in these markets, but that is not an exercise which the Office of Aviation Analysis has performed. In addition, it would be complicated and difficult to perform that, because of the effect of xUP fares - would you count them as economy class fares or first class fares?

 

It's also worth remembering that none of this helps the typical leisure passenger who's reading this forum. He wants to know the answer to the question: If I can book with another airline now, is it going to cost me more if I wait until Southwest opens that date for booking? The fact is that the statistics quoted above could be absolutely correct even if the answer to this question is "yes" on every single occasion.

[Globaliser]

And I see that greatam was typing while I was researching!

[parody]

The comparison therefore loses a bit of meaning

 

Yes, a "bit of meaning", but note that Southwest does sell a "business select fare" and while not first class it certainly must drive up their average fare. Apart from that, these average fares do NOT reflect the myriad a fees (like baggage) that many carriers now charge. Talk about comparing apples and oranges. The legacy carriers get a HUGE, unknown advantage by these fees not being included in the average fares calculated.

 

It's also worth remembering that none of this helps the typical leisure passenger who's reading this forum.

 

But, hopefully readers of this forum read my prior post concerning what Rick Seaney has to say about when legacy carriers release their lowest fares. To my knowledge, as the CEO of FareCompare he has no axe to grind about telling it as he finds it.

[Twickenham]

Agree with Greatam that the methodology for gathering the data is far too simplistic and thus skews the results. But, even if we take head of these data:

 

Southwest Airlines had the lowest average fare

in 10 of those or about 24% of the time.

 

Which means, according to these data, the lowest average fare was on an airline other than Southwest 76% of the time. That's 3 times out of 4.

 

And this is supposed to prove that Southwest has lower pricing?

[Globaliser]

Apart from that, these average fares do NOT reflect the myriad a fees (like baggage) that many carriers now charge. Talk about comparing apples and oranges. The legacy carriers get a HUGE, unknown advantage by these fees not being included in the average fares calculated.

The existence of an advantage is true. But as you say, the extent of the advantage is unknown (at least to us) - so I think that it may be misleading for us to claim that it's "HUGE" unless we know more.

 

For example, it might turn out that the average baggage fee received per fare-paying passenger by airlines other than Southwest is only $10 more than the average fee received by Southwest (taking account of the fact that in both cases there will be a lot of passengers who fly with no checked baggage). That might not change the rankings in some markets.

[greatam]

And I see that greatam was typing while I was researching!

 

You said it so much more eloquently (as always).

[greatam]

Yes, a "bit of meaning", but note that Southwest does sell a "business select fare" and while not first class it certainly must drive up their average fare. Apart from that, these average fares do NOT reflect the myriad a fees (like baggage) that many carriers now charge. Talk about comparing apples and oranges. The legacy carriers get a HUGE, unknown advantage by these fees not being included in the average fares calculated.

 

 

As posted previously, I compared the first class fare vs business select on Chicago to PHX. About $200 difference one way. Extrapolate that with all the other O/D pairings that offer first class service and PRICES and you have very skewed data.

 

And my own analysts figure in the cost of one bag per person ON TOP of the lowest fare we can find (unless our customers ask for another type of fare). This is how we set our prices to our own customers. I sure don't want to be loosing money day after day if this is not the proper way to figure out the lowest prices.

 

Adding the baggage fees is not something that can even be computed on average. There are just too many ways to get free baggage-elite status FF, fare class of ticket, credit card freebies, coupons, etc. etc. The latest marketing gimmick for travel related stuff-FREE luggage coupons if you buy XXX amount of merchandise. Saw it at JFK first-think it was the Brookstone store, then again in Chicago at one of the shops around the Omni hotel just a couple of weeks ago. DH said he saw it at Cabela's in Phoenix of all places. Heavy promotion for hunting out of state-promoting outfitter packages and long guns. How in the world would you quantify that factor???

[parody]

The existence of an advantage is true. But as you say, the extent of the advantage is unknown (at least to us) - so I think that it may be misleading for us to claim that it's "HUGE" unless we know more.

 

I think the word Huge came to mind when I recently read this headline in the Chicago Tribune:

Airlines bag big bucks from fees

 

United Airlines generated the greatest fee income of any carrier in the world: $1.9 billion in ancillary revenues last year

 

 

In the article, they quote a United Airlines representative as saying that about 40% of their passengers pay a baggage fee. Given that the absolute lowest fee that they could pay is $25, assuming that the average fee paid is closer to $30, that would represent about a $12 fee in both directions. No mention is made of other "ancillary" fees.

 

Which means, according to these data, the lowest average fare was on an airline other than Southwest 76% of the time. That's 3 times out of 4.

 

And this is supposed to prove that Southwest has lower pricing?

 

While true, we do need to keep in mind that there are many markets in the top 43 that I referenced earlier where Southwest has absolutely no presence. For example, they do not serve (even in a convoluted way) New York City to Los Angeles. (Might this change after they start in Newark?) So whereas Delta is listed as the carrier with the lowest average fare, it should be no surprise that Southwest is not included. It might be interesting to show results that control for this effect. At the moment, all we can conclude is that within the US more trips are made on Southwest Airlines (which may change after the merger of United and Continental) and that "a million flies can't be wrong".

[Donray]

Agree with Greatam that the methodology for gathering the data is far too simplistic and thus skews the results. But, even if we take head of these data:

 

 

 

Which means, according to these data, the lowest average fare was on an airline other than Southwest 76% of the time. That's 3 times out of 4.

 

And this is supposed to prove that Southwest has lower pricing?

 

 

Like I said, I have not found SW the cheapest. For example, from SNA to Los Vegas I found US Air the cheapest. From the LA area to Salt Lake Jet Blue was the cheapest out of Long Beach.

Wanted to get to San Juan and SW doesn't even fly there so they were not the cheapest.

SW was not cheapest to Tahiti ort Hawaii. Forget going to Europe.

So, how can SW be the cheapest? Depends on where you are flying from and to. All the SW cheerleaders are wrong about SW being the cheapest all the time and everywhere you want to go. . Even there supporter says they are more expensive 70% of the time.

I always check SW prices, but have never flown them.

[greatam]

 

 

For example, they do not serve (even in a convoluted way) New York City to Los Angeles. (Might this change after they start in Newark?) So whereas Delta is listed as the carrier with the lowest average fare, it should be no surprise that Southwest is not included. It might be interesting to show results that control for this effect.

 

5 flights per day OUT of LGA to LAX with stops at either MDW or BWI. And you have been able to fly LAX (or other surrounding airports) through BWI or MDW possibly with an intermediate stop to Islip for many, many years.

 

I myself flew from Los Angeles to MCI to BWI to ISP on WN in 2001 to attend this concert. http://wqedchangeslives.com/lib/press_pdf.php?fn=rockrhythmanddoowop.pdf

 

Friends met me in Kansas City, we all flew to Islip, I rented a car, we spent two days in the City (me working, them sightseeing) and then I drove us all to Pittsburgh. Great fun and I even made the video that is shown so frequently on PBS-Rock, Rhythm and Doo Wop.

[Ms Understood]

For example, they do not serve (even in a convoluted way) New York City to Los Angeles. ".

Generally I would not even think of disagreeing with the far more learned posters on this particular board as my only flying/carrier knowledge is anecdotal but my family flies regularly from ISP ( about 90 minutes drive from NYC) to Los Angeles, either to LAX or ONT. Generally they change in MDW or LAS but that doesnt seem particularly convoluted to me.:confused:

----------------------

Helen.

[parody]

I myself flew from Los Angeles to MCI to BWI to ISP on WN

 

Nice to hear that WN can sometimes fit into your plans even though they do not yet fly nonstop between LGA (or ISP) and LAX. But as some folks have mentioned, a stop or two on WN is not necessarily convoluted. I wonder why they do it?

[waterbug123]

Nice to hear that WN can sometimes fit into your plans even though they do not yet fly nonstop between LGA (or ISP) and LAX. But as some folks have mentioned, a stop or two on WN is not necessarily convoluted. I wonder why they do it?

 

It's supply and demand.

[greatam]

Nice to hear that WN can sometimes fit into your plans even though they do not yet fly nonstop between LGA (or ISP) and LAX. But as some folks have mentioned, a stop or two on WN is not necessarily convoluted. I wonder why they do it?

 

WN never fits into my plans AFTER they canceled the 7:10AM PHX to LAX flight more than a few times (consolidation onto the 8:05 flight). Used to take that flight quite often. LATE for meetings is NOT a good thing.

 

WN never fits into my plans anymore because I LIKE first class (even domestic). I LIKE getting CHEAPER fares, including one bag per person, on the legacy airlines. I LIKE the lounges from other airlines, I HATE the very, very overcrowded Terminal 4 at PHX (shared with US Air/America West), I like the miles that can be used on myriad airlines for upgrades and international flights. And I absolutely DETEST Terminal 1 at LAX. I have flown out of LAX in Terminal 1 numerous times (been flying out of LAX for a very, very long time). Every crapped out person in LA flies WN (I was born and raised in LA, proud UCLA and law school graduate) The crapped out people in LA KNOW no BETTER-they drink the Kool Aid. It is a total ZOO at Terminal ONE. Give me your tired, your poor-no give me your junkies and your wackos on WN out of Terminal 1, LAX.

 

I only flew WN in 2001 because my friends in MCI had plenty of WN coupons/vouchers (so free tickets). That was the deal-they pay for my airfare, I show them a good time in NYC and I paid for the concert tickets (I have been supporting PBS Doo Wop shows for a long time, so I got premium seats at the concert, including two nights of after shows/parties/meet and greets).

 

Great concert. First time Fred Parris of the Five Satins had been on stage that I knew about since 1968, El Monte Legion Stadium. The WN flights were on time (I cannot stand the "happy, happy" FA-those are for leisure fliers who fly a couple times per year). I truly missed my first class seats. I entered the Admirals Club at MCI by virtue of my yearly membership (so no benefit there) and I flew home to LAX from JFK via AA in first class nonstop on a large plane. My friends flew home via BWI to MCI.

 

Would I take that flight again? Not likely-too many other options that offer too many other benefits OTHER than MAYBE a cheap price (VERY, VERY doubtful). I currently have tickets booked LAX to NYC on AA monthly thorough March (my monthly NYC meeting). Would I fly WN into NYC if it was $20-30 cheaper?? Not on your life. I LIKE to pick my seat, I LIKE first class, I LIKE miles that work worldwide, I LIKE airline lounges.

[kenish]

Nice to hear that WN can sometimes fit into your plans even though they do not yet fly nonstop between LGA (or ISP) and LAX. But as some folks have mentioned, a stop or two on WN is not necessarily convoluted. I wonder why they do it?

 

A 6 hour transcon flight has very high fuel costs for a 737. The "sweet spot" is 2-3 hours. The 757, 767, A330 etc on transcons of other airlines are much better for that distance. At the risk of over-simplifying, a gallon of fuel in a plane had to be hauled from the departure point...which requires more fuel enroute.

 

Southwest or any other airline limit their 737 or A320 transcons since it stretches the economics of the aircraft. That's why connecting flights are more popular. Less convenience compared to a nonstop is another reason, of course.

[parody]

WN never fits into my plans

 

That's consistent with the common belief that one either likes Southwest or one hates them. But, rather than using specious statistics in an attempt to convince others of this position, might not it be best to either side-step any discussion of fares (did you ever read Rich Seaney-?) or simply lead off any discussion with something like: Irrespective of what they may charge, I do not fly Southwest Airlines because "I LIKE to pick my seat, I LIKE first class, I LIKE miles that work worldwide, I LIKE airline lounges". (And, furthermore, at least in LA, I don't want to associate with the "crapped out" clientele that uses Southwest.)

 

Looking at Southwest's early morning flight (WN765) from PHX to LAX, I see that flightstats shows that in the period July 1-August 31, they had no cancellations and operated with a remarkable on-time performance of 100% although one would have to put up with an average delay of 5 minutes (with a standard deviation of 5.51 minutes).

[Globaliser]

In the article, they quote a United Airlines representative as saying that about 40% of their passengers pay a baggage fee. Given that the absolute lowest fee that they could pay is $25, assuming that the average fee paid is closer to $30, that would represent about a $12 fee in both directions. No mention is made of other "ancillary" fees.

The article suggests that UA gets between $350m and $450m pa from baggage fees. As UA carries about 60m pax pa across its network, that averages at something between $5.83 and $7.50 of baggage fees per passenger. Without the split between international and domestic (which I couldn't readily find for UA), it's impossible to know the average for domestic routes only. Nor is it possible to know how much of that is the new-type per bag fee, and how much of it is excess baggage fees (which all airlines have always charged).

 

Nevertheless, this suggests that my guess of $10 average per pax may not not actually be far wrong.

 

To compare this against Southwest, you'd also need to know the average baggage fee paid per passenger, so that you could see the difference. To read some posters on CC (not you!), you'd think that Southwest doesn't charge baggage fees. But that, of course, is incorrect. There are some baggage fees on Southwest, and they have been increasing in recent years too.

 

The effect that this could have on the way you perceive the Office of Aviation Analysis tables is illustrated (but only illustrated) by one line. For the Orlando to Sacramento market, the average fare is $202. Southwest has has 27% of this market, with an average fare of $204. Continental, with 13% of this market, has the lowest average fare, at $188. If CO is also collecting on average about $10 per pax more than Southwest in baggage fees, it's still cheaper than Southwest on an average fare basis.

 

I don't think that ancillary fees are going to help much in the comparison. Southwest also charges ancillary fees for extras. EBCI is notable amongst them.

[frugaltravel]

That's consistent with the common belief that one either likes Southwest or one hates them. But, rather than using specious statistics in an attempt to convince others of this position, might not it be best to either side-step any discussion of fares (did you ever read Rich Seaney-?) or simply lead off any discussion with something like: Irrespective of what they may charge, I do not fly Southwest Airlines because "I LIKE to pick my seat, I LIKE first class, I LIKE miles that work worldwide, I LIKE airline lounges". (And, furthermore, at least in LA, I don't want to associate with the "crapped out" clientele that uses Southwest.)

 

Looking at Southwest's early morning flight (WN765) from PHX to LAX, I see that flightstats shows that in the period July 1-August 31, they had no cancellations and operated with a remarkable on-time performance of 100% although one would have to put up with an average delay of 5 minutes (with a standard deviation of 5.51 minutes).

 

+1000. Eloquently put.