There have been ticket price wars almost as long as there have been airlines. One carrier wishes to pick up market share on a particular route and decides to drop ticket prices to take market share from rivals. The long history of airline bankruptcies is a testament to how much discounted tickets can wound a carrier, if the discounts are low enough and go on long enough. An airline has begun to offer tickets for $15 on some routes. Other carriers may have to match that if they want to avoid a sharp drop in the number of passengers and become another statistic in an unforgiving industry.
Frontier Airlines offers flights out of Newark, one of the largest airports in the world. In addition to current routes, in about three months it will start to offer service to Las Vegas, Miami, Orlando and San Juan in Puerto Rico. The $15 fares are presumably to boost passenger traffic on these routes. Carriers from nearby La Guardia and JFK fly to these destinations as well. Competition for passengers from the Northeast to the warmest parts of America is fierce. These are the 20 airlines that have gone out of business in the past year.
What do carriers have to match when they look at the Frontier prices? It may not be $15 at all. The company is known for piling on fees for what many other airlines offer as basic service. These include luggage, seat selection and carry on items. The cost of a Frontier ticket can be much higher than the first price a potential passenger may see. However, even with the “extras,” Frontier tickets set a low bar for total cost.
Frontier is not the only carrier that regularly offers fares well under $100. Most carriers have tickets well below that, but almost always this price is based on certain caveats. Usually first among these is that tickets need to be booked well in advance. This allows the carrier to fill planes early and helps prevent them from flying with empty seats. Most of the sub-$100 fares are for light flying periods, which often means mid-week instead of weekends.
The answer to whether $15 fares are the wave of the future is based mostly on two things. Are those fares really $15 once other than the most basic service is added on? And how many restrictions are there for passengers who need to fly at certain times or on fixed dates? When including hidden fees, some supposedly low-cost airlines end up being unexpectedly pricey. Here is a list of the budget airlines that cost as much as traditional ones.
Sponsored: Tips for Investing
A financial advisor can help you understand the advantages and disadvantages of investment properties. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Investing in real estate can diversify your portfolio. But expanding your horizons may add additional costs. If you’re an investor looking to minimize expenses, consider checking out online brokerages. They often offer low investment fees, helping you maximize your profit.