Have you tried to book a domestic ticket this week? The “new” Southwest Effect in light of the carrier’s operational meltdown is frankly obscene pricing on other airline routes across the country. Is this just supply and demand or is there price gouging going on?
As Southwest Meltdown Continues, Consumers Find Obscene Pricing On Other Carriers – The “New Southwest Effect”
The Southwest Effect is a phenomenon within the airline industry where markets that Southwest Airlines enters see an increase in traffic and a decrease in average airfares. This week, however, we are seeing a whole new Southwest Effect.
I woke up this morning with several messages and emails from friends and clients trying to travel domestically in the USA but finding that airfare is absolutely obscene. Let’s not forget that Southwest Airlines is the largest domestic carrier in the USA in terms of available seat miles. As Southwest implodes, travelers have been forced to search for other options and airfare on other carriers is skyrocketing.
For example, try flying from San Diego to Las Vegas tomorrow and there are no options under $1372:
From Chicago to Denver, nothing is less than $791 and a nonstop is $949:
Phoenix to Orlando one-way? Over $2300 and only United has space:
Dallas to Los Angeles? That will set you back $2500 for a nonstop or $1203 with a stop in Arizona:
Baltimore to Des Moines? $499 on Delta seems like a steal compared to the prices on American and United:
These routes were not cherry-picked. Instead, they represent what my friends or family are searching for and are but a sample of what everyone appears to be finding when searching for airfare.
Is This Price Gouging?
I will stop short of calling this price gouging until we have more data points, though it seems like this is no different than charging $500 for a shovel during a snowstorm. Looking at space, it seems that flights truly are full and the few options that are left are filling up fast…that’s not the issue. The issue is that some of these prices for economy class seem far beyond the standard price for full-fare tickets.
Rather than speculate further, I will just note that those who live by the government’s sword die by that same sword. Airlines insisted they had to be bailed out because they were, in essence, a quasi-public utility. If that was the case then, I do wonder if whether they can just pump prices up to obscene levels now…or whether this is “innocently” the reasonable nexus of supply and demand.
CONCLUSION
There are a lot of people trying to get home this week and finding themselves stuck or priced out. The Southwest meltdown has impacted far more than Southwest Airlines travelers, but everyone who is trying to travel this week. My point here is not to insist that there is price gouging going on, but to raise that possibility and also advise you to consider holding off on non-essential travel this week.
image: Southwest Airlines
I would say that the systems created by the airlines may have resulted in gouging….they are built that way to a sense. As seats filled and demand skyrocketed the prices surged. The question is whether they forced them even higher than the systems had already been set at. It lends itself to the question whether forcing interline agreements during disruptions would solve a lot of this? I think it would have to an extent here. I imagine that a percentage of passengers would have been quickly accommodated as a result.
One thing is for sure. It’s about reaching the point that the Govt needs to step in on this first to get people moving right now, second to look into the pricing today that has developed. and third to make WN pay heavily for passengers who are spending thousands for hotels or other options home.
I don’t really think that is gouging. It’s a result of supply and demand. There is a lot of demand, but almost no supply available. I think the flights are full, but the airline will still sell you a ticket on the flight. They now have to solicit paid volunteers not to take the flight. The cost of that ticket is not only the cost of your flight, but the cost of paying the volunteer to get off the flight. Do I think this is good business practice? No. It’s wrong. But it is how the airlines do it.
jm, I think that’s a given on most days. But some of these fares make you really wonder if there was a reset on just how high they will make them – knowing full well the desperation of many. I hate to wear a tinfoil hat but some of these prices are beyond any normal highs during peak times. And the fact that many of these people are WN passengers that might be forced to pay these fares is fairly cruel. An interline agreement or the Govt stepping in to say everyone needs to help get them home would be a good start.
The current issue is that the number of displaced passengers from the past couple of days far exceeds the number of seats which were unsold at the beginning of the week. Government can regulate, but there is no way to generate more planes and labor to absorb the sheer number of displaced passengers. The scarce remaining capacity is getting assigned on a matter of price.
I expect that Southwest’s compensation will be stingy and not come close to compensating passengers’ consequential losses. In the EU, the compensation would be more generous, no doubt – and such would be priced into every ticket.
I more than understand your points. I’m well aware. However, this has reached a level that would verge on being an emergency. You now have tens of thousands of people stranded with no compensation (many without the resources to afford multi days of lodging which I am sure is also skyrocketing in certain cities as a result) and no ability to get anywhere other than to wait for WN given the lack of interline to other carriers. Seems to me that we are reaching an almost humanitarian level of needing the Govt to provide assistance. The first being at the very least to demand that WN provides lodging help for all those who have no other option. The second that airlines be required to prioritize all stranded passengers (especially elderly and families) on standby with WN required to compensate them when a seat is available.
I also think this is a perfect opportunity for one of the larger carriers to step up with a plan for reduced fares for those who are impacted by WN. It would be a great PR move and really deal a blow to WN’s ego (after this fiasco they deserve it). You see this often when one airline goes bankrupt that others step in to help.
You are taking the discourse beyond a reasonable point when you start referring to this as a “humanitarian” issue. This is a first-world problem, not a humanitarian crisis. A lot of people may not be able to afford hotels, but many can. Some are at home and unable to fly for work or pleasure. Not everyone is scrambling to get home. It may be a humanitarian crisis if airports lost heat and power, had no running water, etc.
I’ll add one other point. A number of bloggers and news articles are encouraging people to book speculative refundable seats using miles or cash. This is further compounding the problem across the entire system. I imagine in light of this that seats are going empty that were canceled last minute and could have been used to move some of these passengers. Further, it’s creating more increases to fares with all of these speculative bookings, many of which will eventually be cancelled. A solution? Temporarily halt for the next 4 days all fully refundable tickets until it settles down.
This strikes me as “last seat pricing” or even pricing tickets when an airline knows it will be oversold but can likely get a volunteer to give up a seat. That has always been expensive. Southwest’s cratering, however, has strained resources to the point that pretty much every flight is near capacity and pricing at last seat pricing is the rule rather than the exception.
And, yeah, if United expects that they will need to spend some $$$ to recruit a volunteer to take “a later flight” (which could end up being next week) from SAN to LAS, asking $1372 does not strike me as preposterous – they could, after all, declare no seats are available at any price.
Southwest deserves some criticism – their business model is supposedly ingenious – keep planes in the air where they make money, not at the gate where they cost money. That is great until it isn’t and when the choreography fails, it fails colossally. But this market impact falls short of price gouging crying out for regulation.
As most of us say, and we’re proven right, friends don’t let friends fly Southwest. It’s a (small) step above Spirit, Frontier and Allegiant although they seem to be doing better than SW this week.
Here is a story on hundreds of bags sitting at TPA with their owners who knows where.
https://www.fox13news.com/news/southwest-airlines-under-federal-review-following-unacceptable-rate-of-cancelations-delays
But hey, frequent flyers get to board the plane early to pick a seat. What a joke!
How remarkably elitist. Southwest consistently provides solid customer service with affordable fares, which allows me, my family and friends to travel and enjoy life and each other. Friends don’t let friends become involved with anyone like you.
Matthew, do you know how to look at a fare display? If so, take a look at what booking class these fares are in (I’m guessing Y or B), and what the effective date of the Y and B fares in these ODs is (I would imagine these fares were last touched before the holidays, but who can say!). You can do this in ExpertFlyer as well as in any GDS.
Your claim that prices are beyond what is normally the price of a full fare ticket is easily proven- or revealed to be false! Please report back once you have done the research.
I’ve seen other places that suggest Southwest is only running about 1/3 of their flights for the rest of the year (this week). If that is true, that is a lot of seats for holiday travelers trying to make it home to find/replace.
Yes these fares are high, but last minute during a peak travel week (not to mention the previous days of cancellations). But rush to judge gouging is a bit premature.
And let’s not take out eyes off the culpability Southwest owns in the prices. When every other airline was positioning crew & craft prior to the weather, what was Southwest doing?
If airlines are now like a public utility not only do I want me pension back, I want a nice, fat , bloated government like pension!!!
My Southwest flight from BWI to FLL on 12.29.22 was cancelled and I attempted to use the WN website to rebook: nothing from BWI DCA PHL EWR LGA IAD to FLL MIA MCO PBI TPA on 12.29.22 or 12.30.22 (I’m leaving on a cruise on 12.30.22). I tried calling ( that was a joke). I was finally able to book BWIATLMCO on Delta using 51000 points for a one way ticket. Gouging? Maybe. But Delta saved the day and I will be able to spend time with my kids on our cruise. Southwest will need to think about why anyone should trust them again until, at the least, they fix their system. Until then, forget it, Southwest.
Makes me feel somewhat ok about paying $2000 for first, round trip, PHL-DFW when my United flight was cancelled
Totally disagree. Most of these you quote are for last seat on the plane Y or J. It is ALWAYS priced that way. There is no open inventory. Day of walk up fare should be very expensive
Why should walk up be so expensive though? have never understood this.. if airlines want to fill more seats, make it more affordable for walk up instead of possibly losing business for being too expensive
Take a remedial economics course and you might start to understand.
Or keep spouting antivax nonsense and other misinformation if you choose.
No different than dynamic pricing for a concert or sporting event.
It might make an interesting case for a flight beginning or ending in Kentucky as the governor has issued a state of emergency to prevent price gouging. I suspect the airline might settle just to keep the publicity down.
What I find funny is that United isn’t suffering the same constraints that they suffered in 2021 and 2022. the PW 777s are now ungrounded and Boeing had resumed delivery of 787s.
NOTE: since this article was published, several airlines have implemented price caps in an effort to get stranded LUV PAX back into position.
It could be the other airlines were attempting to be magnanimous; but I feel the real reason is to avoid “Guilt by Association” with the LUV meltdown. Quick thinking on the part of AA, DL, UA, & AS.
Now, does anyone want to double up on a rental car so we can get home soon!!!!
I think this is basic supply and demand, this is a busy travel week in a busy travel season, many seats on the other carriers are already sold, and within the short term (however you want to define it, but certainly within 2 weeks), airline capacity is essentially fixed, because to add more seats you’d have to have more planes / bigger planes and also more crews (or a larger crew for bigger planes). There’s very few open seats to be booked, and all of a sudden you essentially lose the entire network of the largest domestic carrier for multiple days. Even if UA / DL / AA take some widebodies that are in maintenance and defer the maintenance to absorb this extra demand, you can’t do that instantly, it takes time. So if you really need a seat, you gotta be prepared to pay for it. “Price gouging” (at least in the sense with negative connotation) is really just supply and demand in action after a serious shock that drastically reduces supply and may also increase demand as well (for example, bottled water after a disaster, where new supply is difficult to come in and there’s also higher demand because you can’t access clean tap water). It should not carry the negative connotation that it does, even if it “feels” distasteful, because what would you have otherwise? People who booked seats 4 months ago not even having the ability to give up their seat for compensation to someone who desperately needs to get somewhere? They might be willing to give it up if the got a $500 voucher from UA / DL / AA, but as another poster noted, they’ll have to pay for that voucher somehow in addition to what would be typical for a last minute fare (which is typically already quite high on highly booked routes)