Here’s how to game the ever-changing game…
Over the last year, FCF has been watching the transcon evolution like a hawk, starting with the airlines that are rolling out new seats and, over the last few months, the big fare changes on the route.
FCF predicted in the January issue that JetBlue’s debut on the New York-Los Angeles route (just last month), with new seats and significantly lower fares in Business Class ($1,200 round-trip), would induce a spiral of price-cutting by competitors: American, Delta, and United.
[aside headline=" How to Avoid Over-Paying on the Transcon" alignment="alignright" width="half" headline_size="default"]
See FCF’s last Oct., Dec., and Jan. issues, each of which highlights strategies for getting the best cross-country fares on the Transcon carriers.
These include the Stopover Loophole Strategy, in which you buy an inexpensive premium fare ticket for an itinerary that allows a free stop at JFK, LAX, or SFO (starting at just $991), and the Package Strategy, in which you buy a premium-fare ticket as part of a package that includes a hotel (savings up to 31%).[/aside]
It’s come to pass. JetBlue, as of now, still has the best nonstop transcon fare, and it has forced—in FCF’s opinion—the competition to drop prices, in one case by 54%.
The Six Major Business Class Fare Developments in June
Development #1:
American Airlines’ Fare Evolution
In January, American started rolling out its new transcon aircraft and flat-bed Business Class seats on LAX-JFK, with prices starting at $3,572. Last month, however, AA lowered advance-purchase fares (30-day) from $3,572 to $1,628 for travel on Saturdays, a 54% drop. (The rest of the week the fare is $2,028—a plunge of 43%). Seven-day advance-purchase fares fell as well, from $4,614 to $2,633 (43%).
Development #2:
Delta’s Fare Evolution
In the June issue, FCF announced that Delta pulled date and time restrictions on its lowest premium fares. Now, Delta has dropped its lowest fare (30-day advanced purchase) by another 25%, from $2,238 to $1,678, for travel any day of the week. Seven-day advance purchase fares went from $4,554 to $2,678 (41%).
Development #3:
United’s Fare Evolution
In case you missed it: United also dropped its fares by 49% in May and yet again last month United lowered advance-purchase fares (30-day) from $2,218 to $1,628 for travel on Saturdays, a second drop of 27%. Seven-day advance purchase fares fell as well, from $4,464 to $2,648 (41%).
Development #4:
Virgin America’s Fare Evolution
In January, its premium fares started at $4,080. As of May 30, fares start at $2,490, a plunge of $1,590 (39%).
Development #5:
What’s Doing on SFO-JFK These Days?
Back in January, premium fares were $3,800 to $4,200, even though JetBlue hasn’t yet started service (it launches Oct. 26). Anticipating this, existing carriers have dropped fares up to 47%, as of mid-June.
Development #6:
Advance-Purchase Window Changes
Back in March—the last time FCF did a transcon fare update—the lowest Business Class fare on San Francisco/ Los Angeles-JFK required a 21-day advance purchase. Now, all of a sudden, three major airlines (American, Delta, and United) require a 30-day advance purchase, while still offering shorter advance-purchase fares (down to three days).
Transcon Fare Evolution Recap
- New (leisure traveler) 30-day advance purchase fares are now offered by American, Delta, and United starting as low as $1,628.
- American and United’s current 21-day advance purchase fares start at $2,028.
- 14-day advance purchase fares have plunged 48% since March on American, Delta, and United to $2,268.
- New three-day advance-purchase fares are now offered by American, Delta, and United at $2,908 (down 50% from March).
- Walk-up fares only went down $500 to $800.
Buy or Wait?
FCF still does not believe that the other transcon carriers will match JetBlue’s $1,200 fare anytime soon (gone are the days of America West’s competitive influence on this route). But fares will drop a bit more before long on Virgin America to perhaps $1,650, the amount American, Delta, and United charge.
Look for fare wars on underbooked flights—and watch JetBlue as it raises its fares over time.
When to Buy Which Airline
Jet Blue is the clear winner: It has the lowest fare from LAX and SFO at $1,198 round-trip (three-day advance-purchase requirement) and $1,598 (no advance-purchase requirement).
Comparing the New Fare Evolution: Los Angeles – New York/JFK:
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Comparing the New Fare Evolution: San Francisco – New York/JFK:
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Otherwise (and I know many of you are not JetBlue focused), if you can book 30 days out, consider American, Delta, or United. Fares start at $1,628 from LAX and SFO— down as much as 54% in recent months.
Hedge Fee Strategy
Hedging is cash invested to protect against price fluctuations.
With airfares, that means buying the lowest premium fare now and paying a fee to change it if the price drops. The fee is often equal to the change fee of the ticket.
So, let’s say you buy a United round-trip non-refundable Business Class ticket for $1,628 from Los Angeles for travel in September and you subsequently find a lower fare. United will charge $200 to rebook, and returns the balance in the form of a travel voucher. Your hedge costs $200. Of course, if the fare goes up, you’re sitting pretty.
General Cancellation and Change Rules on Discounted Transcon Business Class Fares
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