April 30, 2004 -- Oh, Philadelphians. You guys are so lucky. The battle between Southwest and US Airways for your hearts and minds has now created more than just fare sales - it's caused a real change in the way US Airways prices flights.
Semi-random, confusing fares comprehensible only to yield management computers are heading for the garbage bin. So are Saturday night stay and roundtrip purchase requirements. The wave of the future, US Airways says, is simplicity: a handful of fare levels that vary depending only on how far in advance you buy, and whether the cheap seats have sold out.
(The wave of the future looks exactly like Southwest's fare structure, in other words. America West has a similar simplified fare system.)
Realistically, smart leisure travelers won't save all that much with US Airways' new Go Fares plan. US Airways' new lowest fare from Philadelphia to Chicago, for example, is $158, which we see pretty often. The big advantage here is for business travelers. US Airways has slashed their last-minute, unrestricted fares to many markets by half -- cutting the fare to Chicago from $740 to $339, for instance. That's a big deal.
Alas, Go Fares are only for certain specific routes flying out of Phildelphia. (See www.usairways.com/about/press/nw_04_0429.htm for the full list.) US Airways told us it's their "goal" to offer more comprehensible, lower fares across their whole network. But supposedly, their maintenance, labor and other costs are too high to be able to afford becoming truly traveler-friendly. We're sure Joe Brancatelli (www.joesentme.com) will be complaining about that soon.
And Southwest, is doing US Airways one better. US Airways may have lowered their top fares, but Southwest's rates are even far below US Airways' new levels. Take a look at the maximum one-way fares on these routes:
|
City |
US Airways |
Southwest |
|
Chicago |
$339 |
$140 |
|
Orlando |
$379 |
$168 |
|
Providence |
$239 |
$79 |
|
Houston |
$499 |
$265 |
|
LA |
$499 |
$299 |
|
Las Vegas |
$499 |
$299 |
|
Raleigh-Durham |
$289 |
$78 |
It's almost a no-win situation for US Airways. With their high costs of operation, they'll find it impossible to match Southwest's ultra-low fares and survive.
What US Airways does have, though, is an excellent partnership with United Airlines. We normally dislike codeshares around here, because they hide who's really running your plane. But hopefully in the future, you'll be able to use US Airways' new fare structure to get low fares on United's very wide network. That's great.
US Airways also recently joined the Star Alliance (www.usairways.com/dividendmiles/star.htm), which gives their frequent-flyer program considerably more oomph. You can now earn or redeem US Airways miles on a slew of big-time international carriers, including Air Canada, ANA, Air New Zealand and Lufthansa. Southwest's Rapid Rewards program may be neat, but it doesn't get you to New Zealand, and it doesn't give you credit for a flight you took to New Zealand.
US Airways is facing up to their financial troubles by simultaneously getting bigger and acting smaller, and that's smart. Lowering fares and joining Star Alliance may help turn US Airways into a strong competitor to Southwest, with its own unique strengths. Let's hope they can find the money to complete the transformation.
