dlaue

Exactly.

Southwest is a low cost airline like the fluid in an ink jet cartridge is a low cost liquid.

nsx

If fares are set at levels which fill the airplanes, you always see peak hour flights priced higher than off-peak flights. Southwest's high summer fares show almost no peak hour pricing premium. That's my clue that the fares are above market-clearing levels.

There's no way to know whether Southwest will reduce fares for off-peak flights, but their time to make that decision is growing very short and foregone sales are increasing with every day they delay the decision.

rsteinmetz70112

Yet if other carriers sell out then Southwest will be able to fill their planes with passengers at the higher fares. It's a game of chicken at this point.

nsx

They are never going to fill the extremely off-peak hour midweek flights charging the same fares as peak hours. This pricing seems to violate everything I've read about yield management.

jeffandnicole

Except, you've yet to site any conclusive evidence that they are forgoing sales, other than a few people here that said they are flying with other carriers, which is statistically very insignificant.

Any evidence that people have of poor pricing is extremely limited to specific routes, at specific times, at specific days. They're looking at a very small sample size. If a 'sale' fare is offered at 1am and purchased at 3am, someone looking at 7am will have no clue that rate ever existed.

Looking at a trip I'm doing later this year, I've been checking airline prices on a nearly daily basis, and SW has generally been cheaper every day I've looked. Some days it does flip flop a little, but not much. And even then, I can fly direct via SW vs. a minimum 1 stop flight via other airlines. I definitely will have luggage as well. The rates are higher than in the past, but they're up across the board with other airlines as well.

I have noticed that SW hasn't had many 'sale' periods so far this spring, but yet looking around at other airlines, no one else has had any deals for the trip I want either.

ERAU_MBA_Student

LGB-OAK is running $59 to $69 through the summer currently, so that is an option.

dsiderx2

OAK-LGB seems to be the only Bay Area - Los Angeles connection that resembles the 2015 prices. Luckily, that still works for me, but I would prefer Burbank.

nsx

Southwest is still in the stage of winning market share in LGB, so they are pricing at or below cost. Under the new pricing strategy, once they have market dominance they will double the previous sale fares. It's the same strategy we detested when United and other airlines exploited their dominance in specific point to point markets.

dsiderx2

Isnt this the first time they've tested this strategy out. Seems like it's isolated to the timeframe between mid June and mid August, although it remains to be seen how they'll price winter travel season.

Is this evident in other markets or just Cali so far this year?

nsx

I only watch California closely. They did something similar last year, holding IIRC a $99 price until finally cutting it to $79 then $73. It's quite a jump from that to $123, especially with lower fuel prices this year.

nsx

It's now less than 3 weeks until the start of the No Deals Summer Season and the LAX-OAK fares have not budged from $123. LAX-SFO is $92. I can't recall any other time when SFO and OAK fares were so different for more than a few days.

Southwest must be planning to complete this experiment in high fares. They will not relent. So be it.

I have decided that this is as good a time as any to burn my stash of Avios at 7500 per LAX-SFO flight. It's slightly better than 1 cent per point plus the satisfaction I get from denying revenue to a company that is gouging customers.

As the flight attendants say, we have choices when we fly. I hope Southwest gets the message when many of us choose other airlines, or driving. The load on my commute hour flight yesterday was 85, even before the start of No Deals Summer Season. I predict historically low loads for high-fare summer flights, especially LAX-OAK.

Troopers

That's me.

nsx

I wonder if the high LAX-OAK fares are intended in part to push customers to buy the 40% cheaper LGB-OAK flights.

For what it's worth, JetBlue just announced a $49 Tuesday-Wednesday summer sale fare for LGB-OAK. Southwest might match it later this morning.

dsiderx2

I have some OAK-LGB reserved but still holding out hope for OAK-BUR. Seems like it even went up a tick today (123 -> 133) for 2 weeks out and the low days around July 4th weekend. Here's to hoping they are wrong about this.

dsiderx2

Also, Virgin America is offering $69 for SFO-LAX but WN is at $92. Why would an infrequent/summer flyer pass on Virgin for Southwest at those prices? Even if it's the same price, I would still take Virgin.