Southwest, American try to lure fliers with $30 fares

Southwest Airlines Co., the largest discount carrier, is offering one-way fares of $30, $60 or $90, to generate demand when the peak U.S. travel season wanes in September. American Airlines matched the sale.

Southwest's sale prices are available today and tomorrow for travel Sept. 9 through Nov. 18, the Dallas-based airline said in a statement. The rates are $30 each way for flights as far as 400 miles (644 kilometers), $60 for 400 to 750 miles and $90 for more than 750 miles.

U.S. air traffic declined in the first half of 2009 as businesses reduced travel in the recession. Airlines have used discounts to lure passengers, and American has said the industry had only two nationwide fare increases this year.

Southwest's offer "is one indication that while airline ticket prices have stabilized recently from their free fall, airlines are by no means out of the woods as oil prices remain volatile and demand precarious," Rick Seaney, chief executive officer of fare-shopping site Farecompare.com, said in an e- mail.

AMR Corp.'s American, the world's second-largest carrier, adopted the fares on competing routes, said Tim Smith, a spokesman. Other major U.S. airlines probably will match Southwest's move because they "will not want to be undercut," Seaney said. The sale covers most of Southwest's 68-city route map, he said.

'Somewhat Disappointing'

Jet-fuel prices for delivery in New York harbor have increased 43 percent since March 2. Southwest today said its traffic, or miles flown by paying passengers, fell 2.1 percent in June and 2.2 percent for the first six months of 2009.

Southwest's sale "is somewhat disappointing in that it suggests that bookings after Labor Day are weaker than would be considered normal for this time of year," Helane Becker, a Jesup & Lamont Securities Corp. analyst, said in a note to investors. She rates Southwest "hold."

Southwest's sale fares include $90 each way between Chicago and Houston or Las Vegas to Providence, Rhode Island; $60 from Baltimore to New Orleans, or Burbank, California, to St. Louis; and $30 for Albuquerque, New Mexico, to Denver and Baltimore to New York. The rates aren't valid on Fridays and Sundays.

Southwest fell 14 cents, or 2.1 percent, to $6.46 at 11:29 a.m. in New York Stock Exchange composite trading. The shares have declined 25 percent this year. AMR, based in Fort Worth, Texas, slid 4 cents, or 1 percent, to $4.11.