In a sign of great uncertainty about demand for air travel this year amid the deep U.S. recession, discount carrier AirTran Airways launched a fare sale to all its destinations Tuesday for flights through the middle of the fall.
American Airlines and Continental Airlines quickly matched on routes where they compete with AirTran, and JetBlue said it would do the same.
AirTran's sale extends through the summer, normally a busy time for airlines when they have been able to reap premiums in the past as more people travel. But now with many people hurting financially, fewer are taking vacations, businesses are cutting back on corporate travel and many who fly are waiting longer to book.
What's also unusual is how far in advance AirTran has loaded its schedule. Prior to two weeks ago, AirTran showed its schedule for about 210 days. On Tuesday morning, the carrier was showing its schedule for the next 267 days. Discount carrier Southwest Airlines Co. as of Tuesday was only showing its schedule for the next six months, while legacy carriers tend to show their schedule for about 11 months out.
"Basically, what they are doing is locking in seats because of the lack of certainty of what's going to happen during the recession," Rick Seaney, head of airfare research site FareCompare.com, said of AirTran. "They can throw all their history out the window."
AirTran, a unit of Orlando, Fla.-based AirTran Holdings Inc., said its sale fares, starting as low as $39 one-way, are available for purchase through March 5 for travel through Nov. 4. The biggest discounts are for travel on Mondays, Tuesdays, Wednesdays, Thursdays and Saturdays. The sale fares are slightly more for travel on Fridays and Sundays.
There are some blackout dates and restrictions involving certain destinations, like Florida and Cancun, Mexico. A 10-day advance purchase is required, and seats at the discounted fares are limited.
New York-based JetBlue Airways Corp. will match in markets where the two carriers compete, spokesman Sebastian White said. Spokespersons for American, a unit of Fort Worth, Texas-based AMR Corp., and Houston-based Continental Airlines Inc. said they have now matched AirTran on routes where they compete. There was no immediate response by officials at Atlanta-based Delta Air Lines Inc., Tempe, Ariz.-based US Airways Group Inc. and Chicago-based UAL Corp., parent of United Airlines.
"A travel date into November is unusually long for a domestic fare sale," American spokesman Tim Smith said.
Kevin Healy, senior vice president of marketing and planning for AirTran Airways, acknowledged that the sale is a big one, even by AirTran's standards. But he also noted that low oil prices, his carrier's low cost structure and capacity cuts the airline has made mean such sales can be profitable.
"I think it's fair to say nobody is really able to accurately gauge demand," Healy said. "Our basic business model has always been to stimulate as much demand as you possibly can. To that end, I don't think that's changed. I think you're seeing more activity from the legacy carriers."
Healy said that it's too soon to know what demand is going to look like this summer.
"There's a lot of uncertainty in the market," Healy said. Referring to President Barack Obama's planned speech to Congress and the nation Tuesday night, Healy said, "Hopefully the president tonight will calm some of those concerns."