Turbulent times which might be a 'new normal', one characterised by significantly more low-cost domestic seat capacity and the rise of secondary airports. Amid rising costs, this presents a significant challenge for the big Four and Southwest Airlines.
Given the challenges for airlines, large and small, I turned to RDC’s Apex Route Development tool to analyse local fares across the domestic market compared to last year, focusing on pricing for future months (July- September).
Analysis Breakdown
- Big Four: American Airlines, Delta Air Lines, United Airlines, Alaska Airlines.
- Low-Cost Carriers: Southwest Airlines, Spirit Airlines, JetBlue, Frontier Airlines, Allegiant, Breeze Airways™, Avelo Airlines.
Apex captures forward-looking airfares on every route these airlines operate, examining fares 180 days, 90 days, 30 days, and seven days before departure. For this analysis, I focused on the crucial 90-day airfare period, where revenue management teams begin to compete intensively for passenger volume.
USA Local Domestic Air Fares, 90 days before departure, 2024 vs 2023
Key Findings
- Big Four's 90-day fares (Jan-Sept 2024): Average $165
- Low-Cost Carriers: Average $111 (33% cheaper)
Forward-looking Apex Data shows significant fare discounts for Q3 2024 compared to last year, with monthly discounts from July to September ranging from -12% to -19%. The Big Four are discounting more aggressively, with September 2024 pricing now only ~20% higher than last year's LCC fare.
USA Domestic Air Fare Discounts, 90 days before departure, versus 2023
In the coming months, Apex data will reveal how much further these prices dropped in the pursuit of volume. This strategy may not be sustainable for all airlines.
Apex provides comprehensive, forward-looking airfare data on virtually all US routes, offering valuable insights into the competitive landscape.
Banner image by American Airlines
