In the past few weeks we’ve been asked several times if airlines are charging lower fares in Springfield due to the presence of Southwest Airlines at the Branson airport (the airline began service there in March).
The people asking have usually just checked out fares online and noticed what they perceive as a drop in Springfield fares. Well, they’re right — Springfield fares are lower. But here’s the thing: fares are always lower in the first quarter, and part of the second quarter.
Here’s what’s going on …
Airlines always lower fares the first four months of the year. It’s this way across the country; it is not unique to Springfield. Why lower fares? The first quarter is the slowest time of the year for air travel. To stimulate sales airlines always have first quarter fare sales.
So first quarter fare sales were part of the equation, but this year there’s another factor at work: the pending merger of American Airlines and US Airways.
The merger announcement came in early February. Within a couple of weeks American became very aggressive in its domestic and international fare sales. Before the merger I received maybe one American sale announcement a month via email. Now I get three or four a week.
This sudden aggressiveness by American has raised eyebrows in the aviation world. Some in the industry (myself included) think the airline is positioning itself for that time when the merger with US Airways becomes a done deal. The combined airline (which will keep the American name) will have three main competitors: Delta, Southwest, and United. By offering aggresive fares now the hope may be that the public will begin considering the merged American a low fare leader.
So here’s where we stand: air fares are always lower in the first four months of the year. And they may have been knocked a notch lower this year by American’s aggressive sales. So, bottom line, there’s no way to know if the presence of Southwest at Branson has lowered fares in the market. All that being said, it doesn’t mean that we won’t ever be able to tell — it’s just too early to tell.
Here’s why ...
The Bureau of Transportation Statistics (BTS) gathers airline fare data every quarter. Publication of the data lags by two quarters. That means fare data for the first quarter won’t be available until the third quarter. We have to wait until then to know if Springfield fares were lower in the first quarter (when compared to the first quarter of the year before).
As for the question of Southwest’s impact on fares … I’d want to have four or five quarters worth of fare data before making a judgment. It would be great if Springfield fares do go down, but right now it’s just too early to know.