Southwest Airlines Co. (LUV) launched a promotional fare sale,
in which it is offering one-way flights for as low as $30, in a
move that could boost travel in the fall and provide a quick surge
in sales for the short-term offer.
The low-fare carrier is offering customers a promotion in which
they can purchase one-way tickets for $30, $60, or $90 based on
length of travel for travel beginning Sept. 9 through Nov. 18.
Tim Smith, a spokesman for American Airlines parent AMR Corp.
(AMR), said American matched the initiatives set by its competitor
Tuesday morning.
Airline carriers typically match price discounts as those
initiatives come into the marketplace. About 80% of American
Airlines domestic market competes with low-cost carriers, according
to Smith.
The low rates comes as some airlines raised fares last month
across parts of their domestic networks, which was seen as a sign
the travel market is stabilizing. U.S. airlines have reported
sharply lower revenue as demand slumped amid the recession. For its
part, Southwest has swung to three consecutive quarterly losses
after more than 17 years of steady profits.
The promotional fares, which don't include taxes and charges,
are available through 11:59 p.m. PDT July 8. The promotion isn't
valid on Fridays and Sundays.
The travel thresholds are for up to 400 miles for the cheapest
rate, between 400 miles and 750 miles for the middle price and more
than 750 miles at the priciest benchmark.
For example, a flight between Baltimore-Washington to New York
LaGuardia would cost $30 one-way, while a one-way flight from
Chicago to Houston could cost $90.
Southwest's shares were down 1.4% to $6.51 in recent trading,
while AMR's stock dropped 1% to $4.11. Southwest's stock has lost
about a quarter of its value this year, while AMR's stock is off by
more than 60%.
-By John Kell, Dow Jones Newswires; 212-416-2480;
john.kell@dowjones.com