Some US airlines slashing fares to lure travellers

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(Xinhua)
Updated: 2008-12-04 10:07

LOS ANGELES -- Some US airlines are slashing prices on some flight, hoping to lure travelers this holiday season and into the New Year, it was reported on Wednesday.

Deep discounts for airline fares come as no surprise, particularly since 2008 was an awful year for the industry, the San Francisco Chronicle said on its Web.

The devastation in the industry -- coupled with falling oil prices -- means bargains should be bountiful and continue into the New Year, just as demand slumps, said the paper.

"Of course, we have low fares all the time," said Marilee Mcinnis, a spokeswoman for Southwest Airlines, was quoted as saying. "But the economy is on the minds of everyone -- and everything felt like we were in a recession and now we know it's official.

"There's a lot of trepidation out there," she said.

Southwest Airlines on Wednesday reported its load factor -- the percentage of seats filled -- for November was 63.2 percent, compared with 69.3 percent for the same period last year.

With sagging numbers like that, at Southwest and at all the other airline struggling in a down cycle, an effort is under way to entice travelers who might otherwise not travel, said the report.

The carriers hope to trigger impulse buying -- because that is one less empty seat at the end of a year when industry losses will be somewhere between 3 billion and 6 billion dollars, after the math is done on climbing and then falling jet fuel prices, said David Castelveter, a spokesman for the Air Transport Association, a trade association for the major airlines in Washington, D.C..

Eight airlines went out of business this year, capacity was cut by 10 percent and there will be 36,000 job losses in the industry by year's end, said Castelveter. "The impact of high fuel prices has been cataclysmic to the industry," he said.

Also on Wednesday, executives of four major US airlines -- Delta Air Lines, Southwest Airlines, Northwest Airlines and American airlines -- said they were ready to cut more flights, after seeing signs of slumping travel demand.

US airlines have been helped by a sudden drop in jet fuel prices, and they already cut capacity this fall to further reduce costs and drive up fares.

But traffic has fallen even faster than the supply of seats, especially since the stock market went into a nosedive.

"October was a bang-up month, almost unexplainably strong," said Southwest Airlines Co. Chairman and Chief Executive Gary Kelly. " The trends changed in November."

"The industry is very competitive and I think everyone is competing for guests. That is the nature of the industry for sure, " said Abby Lunardini, a spokeswoman for Virgin America, the only California-based airline, which was launched in August, 2007.