New York – Airlines Need To Fill Seats, Offer Fliers Cheapest Ticket Prices In a Decade

New York – A suddenly sweet wave of deeply discounted airfares—prices on some routes out of New York area airports are 50% lower than last year—offer a rare bright spot for corporate budget-cutters. And it’s not so bad for local airports, or even some airlines.

Travelers all but stopped flying last October, just as carriers were recovering from early 2008’s brutal run-up in fuel prices. With the holiday travel season over, airlines now must hustle to boost demand, since flying a plane is an expensive proposition, whether it’s empty or full.

Some of the biggest fare cuts are on flights between New York City and Europe. Continental has round-trip flights between Newark and Dublin for just $310, a 52% decline in price from last year, according to FareCompare.com.

On the domestic front, Delta has round-trip flights to Las Vegas for $215, a 19% discount. Prices on flights to San Francisco on JetBlue and American, now $231 round-trip, are down 29% from last year.

“It’s probably the cheapest time in a decade to travel,” says Rick Seaney, chief executive of FareCompare.com. “At this point, [airlines] are not even worrying about making money on flights; they’re just worried about putting butts in the seats.”

Don’t cry for the airlines yet, Mr. Seaney adds. Last year’s fuel crisis forced carriers to cut back drastically, paring the number of flights and dropping unproductive routes altogether, and so they entered this latest downturn in a relatively strong position. Indeed, analysts estimate the industry could save more than $20 billion on fuel this year, compared with last.

As the economy continues to sputter, the airlines will continue to offer sales and cut capacity. Delta says it will reduce its capacity nationwide by 6% to 8% in the next year.

And the airlines will try to squeeze the most out of the passengers they do attract with variations on things like bag fees and pillow charges. JetBlue, for instance, has started a new premium program, of sorts, that offers extra legroom for a fee.

Some of this offers a silver lining for New York. JetBlue has pared back to its core business and is ready to cut further, but 61% of its flights go through New York, and that percentage could climb as JetBlue emphasizes flights to the Caribbean and routes on the East Coast. Other airlines are focusing on high-margin international flights—many of which go through the city—and some carriers are even talking about adding flights to their overseas routes this year.

The strength of international travel has meant only slight declines in traffic through New York, compared with other cities.

The area’s airports counted 107 million passengers last year, down 2.7% from 2007. While it is the first year since 2002 that the overall passenger count has declined, the number of international passengers moving through the city’s airports actually increased by 3.4% in 2008.

By comparison, Boston’s Logan International Airport experienced a 7% decline last year compared with 2007. Other cities have seen even steeper drops.

Round-trip fares for these popular flights departing from New York area airports are down 22% or more from this time last year. Taxes and fees included.

ORLANDO
Continental
$140
-58%

LOS ANGELES
American, Delta, United
$255
-22%

MILAN
Delta, Alitalia
$365
-49%

LONDON
British Airways, Air France, Virgin Atlantic
$435
-42%

Source: FareCompare.com