- Airlines unleashed lower fares than ever this week to destinations like Tokyo, Japan, sitting up demand.
- But while Americans delight in their cheap flights, the gamble lies in whether they’ll able to take them.
- Most countries have not opened their doors to US tourists even as vaccinations soar.
- See more stories on Insider’s business page.
Airlines are making it hard for Americans not to book international trips by unleashing dirt-cheap fares to normally expensive destinations, and the irresistibly low prices are breeding a new form of gambling.
A small sampling of deals this week includes $226 round-trip flights to Tokyo, Japan on United Airlines from Philadelphia, $313 round-trip to Italy on Delta Air Lines from Miami, and $320 to France on Finnair from New York.
Even with most of the world closed to US tourists, many Americans have not been able to pass up on the deals airlines are offering despite the risks. Professional deal-finders say that they’ve never seen anything like the deals on display this week.
“[This is the] craziest deal week of deals we’ve seen in a long time,” Scott Keyes, founder of Scott’s Cheap Flights, told Insider.
But while travelers are planning their newly booked trips, the question of whether these countries be open to Americans in time lingers.
Henry Harteveldt, an industry analyst and confound of Atmosphere Research Group, calls the phenomenon the “price of courage” where customers see a fare so low it makes them willing to book and take the gamble that they’ll actually be able to go.
That price varies from destination to destination, and many Americans discovered their price of courage when flights Japan went on sale this week. While flights to Europe could be had for $300 before the pandemic, a traditionally expensive destination like Japan was irresistible to many at the price-point of $200, even though the country isn’t open yet.
Keyes said that Japan is probably at the top of the list for most of his subscribers given the traditionally expensive nature of flights to the country. And the “mental swing” of realizing it’s cheaper to fly to Japan than it is to fly across the US, in some cases, likely made the deal too good pass up for many.
Airlines know that the borders are not yet open and are still offering the fares for as early as this weekend. But they likely aren’t unleashing these fares hoping the borders don’t open up and flyers will lose their money.
“I don’t think the airlines set these fares out there with a devious mindset of, if you will, bait and switch,” Harteveldt told Insider. “That’s not the way they work. These low airfares also, to a certain degree, show some airlines’ desperation.”
The sales are an easy way to quickly bring in revenue by creating demand for a popular destination in the hopes it will be open in the near future.
“Airline pricing managers are really good at tempting us to book travel,” Harteveldt said. “They are offering these low fares in order to attract and layer in a certain level of reservations and bring some cash across the threshold because, obviously, airlines still have expenses.”
These flights won’t be profitable on $200 fares alone, of which the airline only gets around half after taxes, and flyers will be tempted by the airline to spend extra on things like priority boarding, extra legroom seats, and lounge access.
Gallery: I flew on Southwest and Alaska, the two airlines competing to be the best of the West Coast and the winner is abundantly clear (Business Insider)
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I flew on Southwest and Alaska, the two airlines competing to be the best of the West Coast and the winner is abundantly clear
- Alaska Airlines and Southwest Airlines are in competition to be the airline of the West Coast.
- Both are similar but each has its strengths like Alaska has a greater West Coast route network.
- Southwest is a great option for leisure travelers but Alaska has more perks for business flyers.
- See more stories on Insider’s business page.
The West Coast of the US stretches more than 1,000 miles with no shortage of major cities from San Diego to Seattle.
All the major US airlines serve this important region of the country but two are battling for dominance, Southwest Airlines and Alaska Airlines.
Alaska is based in Seattle, although its name suggests otherwise, and is a mid-tier US airline with the bulk of its operations on the West Coast.
Southwest, on the other hand, is the country’s largest low-cost carrier with a nationwide presence. And while the West Coast is an important region for the airline, it’s just one of many Southwest serves.
Both carriers have sought to grow market share on the West Coast during the pandemic. Southwest added Santa Barbara and Fresno to its California route network while Alaska has added routes from existing cities.
I flew on both airlines this year to see which one was truly the airline of the West Coast. Here’s what I found.
West Coast connectivity: Alaska serves 29 cities up and down the coast, including smaller cities like Everett, Washington; Santa Rosa, California; and Medford, Oregon.
Read More: I flew on Alaska for the first time since it stopped blocking middle seats and it was the closest to normal I’ve seen during the pandemic
Southwest serves 15 West Coast cities and plans to serve two more this summer. Bellingham, Washington flights will also open sometime this year.
Winner: Alaska Airlines. The airline’s connectivity between West Coast cities large and small cannot be beaten by Southwest’s existing network.
What comes with the ticket: Every Southwest ticket includes free seat selection anywhere on the plane after boarding, two checked bags, a carry-on bag, and all the onboard amenities.
Southwest has open seating so any open seat is available for passengers.
Alaska does allow free seat selection for economy but charges extra for seats close to the front and exit row seats.
Alaska, like many full-service carriers, has also embraced restrictive basic economy fares that replaced its cheapest fares. The product is generous with and limited advanced seat assignments and a free carry-on bag but flyers will have to pay more for better seats and checked bags.
Southwest doesn’t have change or cancel fees for any ticket.
Alaska has eliminated change fees but not for basic economy fares, known as “saver” fares.
Winner: Southwest Airlines. The flexibility and free extras offered by Southwest put it well and above Alaska. It’s worth noting, however, that even Alaska’s basic economy fares are more generous than many of its competitors.
Boarding: Alaska boards its aircraft in groups that are assigned based on seat location and fare class. First class boards first, followed by elite status holders, those sitting in “premium class.” Economy then boards back to front, for the most part, and basic economy flyers board dead last.
On Southwest, however, passengers are given a boarding number and group that’s determined by how early they check-in for the flight. Once on the plane, they can select any open seat.
Winner: Southwest Airlines. Alaska’s boarding process relegates basic economy passengers to the very last section while even the passenger with the cheapest ticket on Southwest has the opportunity to board earlier if they check-in at exactly 24 hours prior to departure.
Onboard amenities: Both airlines are in the process of modernizing their fleets but older aircraft remain. On Southwest, for example, I flew on the 737-700 fleet on my most recent trip and it was the furthest from modern.
But its updated aircraft have a great, modern look, as I found on flights from New York to Orlando in 2020.
Read More: I flew on Southwest Airlines during the pandemic and came away impressed by how well the largest low-cost US airline handled social distancing
Alaska has the same issue. Its newer Max aircraft is a show-stopper but older aircraft seem tired.
Both airlines also offer paid in-flight WiFi and streaming content.
Alaska does surpass Southwest, however, by offering in-seat power to keep devices charged.
Winner: Alaska Airlines. Both airlines offer similar products but Alaska just eeks ahead with in-seat power.
In-flight service: Both airlines have restored portions of their in-flight service since the pandemic began. Alaska, for example, serves soft drinks and snacks.
Southwest just brought back Coke, Diet Coke, and 7UP, as well as more snacks.
Read More: Southwest is reverting to its normal boarding policy and bringing back fan-favorite in-flight amenities
Before the pandemic, however, Alaska sold meals and snack boxes while Southwest just stuck to drinks and small snacks.
Winner: Alaska Airlines.
West Coast feel: Alaska has its roots in the West Coast and that shows in its branding. The colors are vibrant, there is a focus on West Coast brands in the in-flight service, and the airline is based in Seattle.
Southwest has a generic appeal as it connects the US through bases across the country with no specific ties to the West Coast. There’s no West Coast feel.
Winner: Alaska Airlines: There’s an undeniable feeling when flying on Alaska that it’s more in tune with the West Coast vibe than Southwest.
National connectivity: Alaska is highly concentrated on the West Coast while Southwest has bases across the US.
Southwest doesn’t have the sprawling West Coast network that Alaska does but it does offer connections between most of the region’s major cities and connections to the rest of the country through its mid-continent bases in places like Phoenix, Denver, Las Vegas, and Dallas.
Alaska only has hubs in the West Coast cities of Los Angeles, Seattle, San Francisco, and Portland, requiring a stop in one of those cities before heading east. The airline does partner with airlines like American to offer mixed-airline itineraries but that could be difficult if the airlines are in two different terminals.
Winner: Southwest Airlines. Having more mid-continent bases allows for more convenient journeys with lower travel times for customers.
Business traveler amenities: Corporate travelers have different priorities than most leisure travelers and will often spend more for seats in premium cabins and access lounges.
Alaska has premium lounges in six airports, and partners with American and Qantas on lounge access for members. Southwest does not have any lounges.
Alaska’s jet aircraft also have first class cabins, the domain of the business traveling road warrior, while Southwest does not.
A special section of economy is also available on Alaska. Called “premium class,” seats in the section offer additional legroom and come with complimentary alcoholic beverages.
Alaska is also a member of the Oneworld airline alliance and Alaska’s elite status holders can use their benefits on other airlines like American and British Airways, and vice versa. Southwest is not a part of any airline alliance.
Southwest does have a special fare for business travelers, called “Business Select,” that includes extras like priority boarding and free alcoholic drinks (suspended during the pandemic).
And Southwest does have better connectivity outside of the West Coast. A business traveler in St. Louis looking to fly to New York couldn’t even choose Alaska if they wanted to.
Winner: Alaska Airlines. Business travelers have more premium amenities at their disposal on Alaska, if the choice is between Alaska and Southwest.
Airline of the West Coast: Alaska Airlines. Both airlines are incredibly similar but Alaska has more West Coast-oriented amenities to help it pull ahead of Southwest.
Profitability could also come from the belly cargo that can be carried or if business travel resumes and the premium cabins are filled by corporate clients.
Read More: 5 charts reveal how badly the loss of business travel is hurting America’s biggest airlines – and why a COVID-19 vaccine won’t ease the pain
How flyers can hedge their bets on international travel
Even with some countries opening their borders to Americans, booking any international travel is a risky bet.
Japan has maintained strict travel barriers during the pandemic and has already barred foreigners from visiting to spectate the Tokyo Olympics this summer. As of now, two-week quarantines for all inbound travelers to the Land of the Rising Sun, even those with negative COVID-19 tests, according to the US Embassy in Japan.
Europe is showing more promising signs of opening but not even the airlines selling the tickets know exactly when the borders will open, despite their best efforts to get them open. And while it may seem that the only safe bet is to book tickets to countries currently open to Americans like Iceland, Greece, and Croatia, border controls can change depending on the virus.
Chile opened its borders to tourists in 2020 only to close them in March, prompting American to delay its planned non-stop flights from New York until June.
The most recent deals do give flyers options to hedge their bets, especially as most US airlines have eliminated change fees. United started the trend of eliminating change and cancel fees over the summer, and that includes flights to international destinations like Europe and Japan.
“Going forward, you also won’t have change fees for other international travel that originates in the U.S.,” United’s website says.
American, also offering dirt-cheap fares to Japan, is also waiving change and cancel fees for economy tickets and up. “Effective immediately, American will eliminate change fees for first class, business class, premium economy and main cabin (except basic economy) tickets for all long-haul international flying when travel originates in North or South America,” the airline announced in November.
Many of the lowest fares advertised by American, however, are basic economy fares that aren’t covered until the new policy, so flyers will have to pay up to economy for that flexibility. Flyers should be checking these rules when booking any international travel as it could save their trips in the event a country doesn’t open in time or closes its borders again.
Booking trips as far in the future as possible can also increase their chances of the country being open by then but the bottom line is that there’s no guarantee.
What to do if a country doesn’t open its borders
Free cancellations and changes also aren’t always free. Flyers who cancel a trip under the policy will most likely get a travel credit, not a cash refund, and those making a change will most likely have to pay a fare difference.
For example, if a traveler booked a round-trip flight to Japan for $226 and the flights on the dates to which they want to change only have flights for $700, they’ll have to pay an extra $474 in the fare difference.
But with airlines constantly changing their schedules, there is a good chance a traveler will incur a schedule change, the term for when an airline changes any aspect of a flight. If a traveler incurs a schedule change, they can use it to get a full refund, which could be helpful if the country they’re supposed to be visiting doesn’t show signs of opening.
The perks of booking with a US airline that allows free changes is that the value of the ticket can instead be applied towards any flight in its network. Flights between New York-Los Angeles, for example, are currently selling for around $217 round-trip, potentially salvaging a trip by just changing the destination.
Keyes has shifted his business during the pandemic to educate flyers on how they can make the most of pandemic travel, even with all the uncertainty. Travel to certain restrictive countries, like Japan, is cautioned against and there’s a coronavirus travel resource guide on the Scott’s Cheap Flights website.
“There’s not a 100% guarantee that these [international] trips will happen but the downside risk of being in a situation where you would lose your money … I think is quite low,” Keyes said.
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