Delta Air Lines is reducing service to Japan, along with other major airlines, as the disasters there as well as rising fuel prices are wreaking havoc with the airline industry. Image from Wikimedia Commons.

Delta Air Lines has announced that flights to Japan will be reduced in the wake of the tsunami and earthquake. Falling demand and rising costs have caused numerous airlines to cut service to and from Japan after the nation was rocked by natural disaster. The entire airline industry is facing falling revenues and rising fuel prices.

Major airlines cut service to quake-ravaged Japan

The number of flights going in and out of Japan is being reduced across the board, as major airlines have too little demand and costs are too high to keep sending flights, according to Bloomberg. Service to and from Japan is being reduced by the Qantas JetStar line, Singapore Airlines, Cathay Pacific Airways and Korean Air Lines, as the earthquake that struck on March 11 has crippled demand.

Delta, according to Reuters, will reduce service levels 15 to 20 percent until May. The company estimates that the quake, tsunami and nuclear disaster will cost it $250 to $400 million. However, American Airlines has not yet announced it will reduce its service to Japan, which is provided through a joint venture with Japan Airlines. More than 9 million people fly to the U.S. from Japan each year.

Fuel prices wreak havoc with airlines

Airlines worldwide have been contending for the past several months with rising jet fuel prices. Rising oil prices due to unrest in Libya and the Middle East have been part of the increased cost of jet fuel, but harsh winter conditions during the past few months have also negatively impacted fuel prices and airline revenue. As a result, air fare increases are being implemented by numerous airlines. Southwest Airlines, for instance, has already had to raise air fares six times since the beginning of the year, according to Forbes, despite a 13 percent increase in the number of passengers flying with Southwest since the same period last year.

Expect summer vacation to cost a bit more

The increases in oil, gasoline and jet fuel prices have nothing to do with any actual shortage of supply caused by unrest in Libya, which provides only 2 percent of world supply, according to CNN. Speculators raise prices because of fears that the unrest will spread.

Unfortunately means that a full tank of gas is going to cost more during the summer, and some people may need installment loans to finance plane tickets for summer travel. How much more costly air tickets will become remains to be seen, but projections seem to indicate that the cost of travel will continue to rise for some time.

Sources

Bloomberg

Reuters

Forbes

CNN

Now flying to an Appalachian Trail near you – for less! (Photo Credit: CC BY-ND/Dean Morley/Flickr)

When Southwest Airlines comes to town, competing airlines take notice. According to USA Today, it’s called the “Southwest Effect,” and it is a powerful market force. It is so powerful, writes USA Today, that within an hour of Southwest Airlines’ announcement that routes are being extended into South Carolina, the competition dropped its fares into the state by 30 percent or more.

Southwest Airlines comes to town, consumers win

Within an hour of announcing routes to destinations in South Carolina – Charleston and Greenville-Spartanburg – Southwest Airlines shook up the industry and forced competitors to offer cheaper air travel rates. Those looking to enjoy what the Palmetto State has to offer will be able to more easily afford air travel now that the Southwest Effect has blown in like a warm southwesterly wind. According to Charleston’s The Post and Courier, “within an hour of Southwest Airlines’ revealing details of its service launching from Charleston International Airport next year, local airfares plunged to $59 each way to Southwest-bound destinations — but only after March 13.”

Travel agents anticipate added business

John Powers of Travel Management Group in Charleston told local media that the move by Southwest Airlines has caused a veritable tsunami of savings. “All major carriers cut their rates by at least 30 percent,” he said. “And most slashed prices considerably more.” For instance, one-way flights for which competitors used to charge $228 have dropped all the way down to $59 to match Southwest Airlines.

ABC affiliate News 4 of Charleston shared similar reports of lower airfare for flights originating after March 13. One flight from Charleston to Chicago was $219, but dropped to $99. Even flights with stop-overs, like one to New York City, went from $400 to $129 one-way. Flights out of Greenville-Spartanburg should also see dramatic decreases, say travel industry experts.

Sources

USA Today

Symptoms of the Southwest Effect include lower fares

Image from Flickr.

Yes, Southwest Airlines is having a huge sale on plane tickets. Several round-trip tickets will cost only $50, $75 or $100 if you purchase tickets today through the end of the day Thursday. You can even get one-way tickets for as low as $25.

But wait! Before you head to Southwest Airlines web site to get a ticket, take heed: Blackout dates on these fares are Dec. 17 through Jan. 4. So if you’re looking to get tickets for Christmas, Channukah or New Year’s, you’re out of luck. I was really excited to see the Southwest Airlines sale prices because I wanted to fly somewhere for New Year’s, but then I was sorely disappointed.

Marketing strategy

Of course, Southwest Airlines decided to have this three-day sale during a time when a lot of people will already be looking for airline tickets. Being able to get a plane ticket for less than the minimum borrowing amount for most paydayloans is enticing, even if it’s for a different time period than what the person is looking for.

Because a lot of people are already looking for plane tickets, a lot more eyes will fall on the cheap airfare Southwest Airlines is offering. Of course, they’ll be disappointed, just like I was. However, the idea of getting to fly somewhere for $50 will no doubt have people inventing reasons to go, just as the web site suggests you should.

Still time to plan

The super cheap airfare applies to dates between Dec. 2 and Dec. 16. After the holidays are all over, you can get tickets for the sale prices for Jan. 5 through Feb. 10. So, though buyers have plenty of time to plan the agenda for their trips, they don’t have much time to decide where to go. Southwest Airlines stresses on the Fourth Quarter Sale page that these prices are available for 72 hours only.

January is a notoriously dead month for traveling, as people often like to stick close to home following all of the holiday hubub. However, people who live in snowy, icy climates and would like a little mid-winter sunshine should view this as a great opportunity.