Thanksgiving is just around the corner, and there’s no question it’s one of the biggest travel periods of the year. Over the last few weeks, airlines have been phasing in their seasonal schedules, which are designed to handle high volumes of holiday passengers. We’ve seen that many flights are already full. Travelers are scrambling to find the best way to get to where they’re going, so that they aren’t stranded. But beyond the passengers and baggage, airlines must bear the costs of the extra fuel they have to use to transport the bags. For a company like Spirit Airlines that operates on lower cost per mile, this isn’t necessarily a problem; but if the airfare was higher to begin with, it’s a significant drag on margins.
To get around some of this cost, Spirit has invested in a rapid turnaround test where they can deploy more fare seats, attract ancillary fees, and tinker with outbound schedules. This is, of course, disruptive to most airlines, and rightfully so. It hurts margins, and the big question is if Spirit’s approach can be sustained during peak travel periods, which are largely dependent on travelers’ willingness to pay more for their products and services. To read more about this dynamic, see my latest post.
Airlines are finding new ways to generate extra revenue and mix their travelers, and it makes for a dynamic landscape where innovation will shape air travel moving forward. JetBlue Airways, which earns nearly $400m per year in ancillary fees and revenue, is quite different from other large US legacy carriers. That’s why they are such a welcome addition to the industry and why we continue to watch their expansion closely.
Below are a few charts and tables that show the fare levels for popular routes at the end of summer (most traveled this year are holiday related as we near the beginning of December). You can also click here to see more fare charts.
Note: All data were obtained from the Airlines Reporting Corporation. Airlines operate on OEC calendars.
