In mid-March, you might remember that US Airways decided to lower fares from Rochester to a bunch of cities and said it would monitor them to see if it was the right move. Now that we have two months under our belt, how are fares looking? It’s a mixed bag, but some low fares remain while others are long gone.
In the US Airways internal newsletter from the end of March, it said “These fare reductions will be analyzed over the next two months to determine whether an increase in passenger loads is sufficient to offset the decrease in fares.” It’s been two months. Here’s where things stand:
You’ll probably want to click on that chart to see it full-size, but what you’ll see is that largely across the board, last minute fares have stayed low while leisure roundtrip fares have shot up. The most interesting thing, in fact, is that advance purchase fares have virtually disappeared from the market. Now, nearly everything is a walk-up fare, though the lowest fares do sometimes at least require a roundtrip purchase.
Why would US Airways do that?
This is all speculation, but what US Airways may be finding is that by lowering its last minute fares, it was getting more of those last minute business travelers on its airplanes. That means the airline has fewer seats to fill with leisure fares. If leisure demand remains strong, then those remaining seats can be filled with leisure travelers at those walk-up fare levels.
You might think that this means US Airways has one fare in the market, but that’s certainly not true. There are just a lot of different walk-up fares. In the Rochester to Philly market, for example, there are six different fares. The lowest requires a roundtrip purchase and a one night stay. The next three are non-refundable and the last two are refundable. Those are the only differences.
You might not think this makes any sense, but US Airways can just use its revenue management system to decide how many seats to sell at each level instead of relying on hard-coded fare rules to make the decision. It gives the airline more flexibility, but it also requires that more attention is paid to the process.
Is this the final state of things in Rochester? I doubt it. Nothing is final when it comes to pricing. But if you’re looking at it from a business traveler perspective, it’s good news so far. From a leisure traveler perspective? It’s not nearly as cheap as it was. But let’s check again in a couple months to see where things stand. I’m marking it on my calendar.
8 comments on “Has US Airways Kept Rochester Fares Low? (Sort of)”
Since other airlines always match fares, makes you wonder how this effects them. While US may fly around the east to more places, if others matched people would fly whichever carrier they liked. US could loose passengers to the other carriers and have to fight more to fill their flights by using the lowest fares to grab flyers.
I’ll help beef this up, David. For awhile there, I thought there wasn’t going to be a single comment! Apparently nobody likes Rochester.
Other airlines do match fares. That won’t matter for Philly or Washington where US Airways is the only nonstop but it could hurt other markets if others decide to undercut. But we’ll see where it goes. This isn’t going to be a highly contested market from a pricing perspective.
My comment from this morning looks so lonely since its the only one so I thought I would leave this to keep it company. :-)
What market share does US have in Rochester?
If they have only a few flights to hubs then I’d think they would have to keep prices in line with other carriers more, since other carriers would have plenty of space.
It’s hard to know the exact share without doing more in-depth work because the BTS reports show by operating airline:
But we do know that Air Wisconsin operates entirely for US Airways and has over 8%. AirTran has the most with an 18.24% share.
Thanks for that link, it was interesting looking at a few cities. I’ll have to check it out more.
I will say US Airways has saved me some money by having the cheapest walk up fares but none have been out of ROC.
Funny to see how things have changed since 2011. Now AWE (combined with regional subsidiaries) has grown a significant amount in ROC, offering up to 16-20 daily departures depending on the season. It appears to most markets the low fare game has worked, but to business markets like CLT (Lowest is generally $445) and ATL on US, prices are still very mix matched.