Discount carrier ruffles foes with its bargain prices

3/12/2010

DALLAS - Discount carrier AirTran Airways fired the first volley of the summer airfare wars this week, causing bigger rivals to match prices at a time when they would rather raise them.

The sale that AirTran started - set to end last night - included some seats on a few short trips as cheap as $44 each way, not including taxes and fees. What really made the sale stand out was its duration, covering travel from March 19 until Nov. 16.

Other carriers were forced to match on routes where they compete with AirTran or risk losing many passengers to their low-cost rival. Among those matching AirTran's sale were Delta, American, United, Continental, and US Airways. Those sales too were set to expire last night.

"It's very rare that we see a 200-day sale - that we get to buy that far out into the future," said Tom Parsons, chief executive officer of travel Web site BestFares.com.

The length of the AirTran promotion is important for other airlines because it means they were forced to sell seats for the peak summer travel period cheaply.

Airlines have seasonal clocks when it comes to revenue: They try to make enough money in the summer to last through the winter.

Analysts expect five of the six largest U.S. airlines to lose money in the first quarter of 2010, with only Southwest forecast to make a profit. But in the second and third quarters, each of which includes part of the summer travel season, analysts think all six will make money.