Winging It: Peak-season travel fares falling

No other purchase I can think of seems quite as sensitive to economic conditions as an airline ticket. Prices can soar into the stratosphere in good times and fall precipitously when times are tough.

During recent periods of strong growth, airlines couldn't seem to raise fares fast enough. In the late 1990s, last-minute round-trip prices between Philadelphia and the West Coast approached $2,500.

Today, it's just the opposite. I wrote about the travel industry's desperation in the current economy in the column of Feb. 23, and I said to expect deep discounts to get you out of the office on a business trip or take a vacation.

Now industry watchers say they think fares for peak-season summer travel could fall even more in the next month or two.

Some of the lowest fares available recently defy logic for customers and can even surprise those of us who think we know something about the subject.

Take the experience of Fergal Mullally, an astronomer who lives in Plainsboro, N.J. He asked me to explain why Continental Airlines is charging him far less to take connecting service from Philadelphia, through its Newark hub, to fly to Dublin in his native Ireland, than it would have charged for a nonstop flight from Newark.

Mullally lives equidistant from the two airports, so he shops for fares from both.

I double-checked the fare Mullally told me he paid for the trip, for himself and his girlfriend, leaving June 18 and returning June 29.

I was surprised by how low prices were for the peak of the vacation season. But I was stunned by the difference in fares from the two airports.

For Mullally, Continental's nonstop round-trip fare from Newark was $694. Riding Amtrak from Philadelphia to Newark, and then taking the same nonstop flights to and from Dublin was $457. (Continental uses both commuter flights and Amtrak trains to feed traffic from Philadelphia to its Newark hub.)

When I checked fares on www.continental.com last week, the difference was even greater: $424 round-trip - no train ride - from Philly and $684 from Newark on the same June dates.

"It seems to be lunacy," Mullally said, after spending time on the phone talking to three Continental representatives, pleading unsuccessfully to get the lower Philadelphia fare from Newark. That would save him time backtracking from Plainsboro and save the airline from having to pay Amtrak to transport him to Newark.

"We decided, as crazy as it is, we should go ahead and buy it," he said. "But we're going to continue grumbling about it."

What Mullally ran into is actually not as crazy as it seems for traditional hub-and-spoke airlines. They usually add a kind of convenience premium to nonstop flights from their hubs, while offering lower fares to connecting passengers from other cities.

What's new this year is how much difference there can be.

For instance, on www.orbitz. com, US Airways' lowest round-trip fare last week for its nonstop flights between Philadelphia and Dublin on weekends in April was almost $1,000. But the fare was just over $400 if you were willing to let the airline fly you to Amsterdam, connect to an Aer Lingus flight to Dublin, and return nonstop to Philadelphia from Dublin.

What's more, fares for weekday flights in late June between Philadelphia and many European cities are $800 to $900 for nonstops. The prices are just over half that much for connecting flights.

Rick Seaney, chief executive officer of www.farecompare. com, says the recession has put such a dent in long-haul international air traffic that he expects fares - especially for those willing to connect - to go even lower.

"Continental and US Airways have been extremely aggressive," Seaney said. "The great deals in May are slowly leaking into June. They're testing the market. British Airways just threw out some fares for mid-June for $740 to London, and American just fired off another round of discounts."

The strongest evidence Seaney sees for the depth of the recession is what has happened to business-class fares on international routes.

In the late 1990s and in more recent years, a round-trip business-class ticket between Philadelphia and London could cost $6,000 or more. Today the average between many U.S. cities and Europe is about $4,500, and Seaney said he has seen some for less than $3,000.

Indeed, looking at Orbitz for a business trip in early May between Philly and London, US Airways will let you sit - or practically lie down - in a seat up front for $2,235 round-trip.

So for those who can still afford it, have a good flight!