Unprecedented Airline Fare War Persists in Dallas

The airline industry had it good, heading into 2015. Profits were at record highs, oil was dropping, and share prices were all soaring.

Critics have persistently said the airlines would eventually destroy themselves, complete morons bereft of the basic instincts that have permitted mankind to survive over 30,000 years.

Alas, fare wars are have deleterious effects on profits and share prices.

While that’s no longer the case, the “very toxic fare environment” has continued, said Virgin America Chief Executive Officer David Cush.

“We are not going to fly passengers at rates that will not make money,” he said on a Thursday conference call with analysts. “We are going to make sure we get an average ticket value up to where its sustainable and we can earn a return, and we’ll take the hit on load factor.”

One-way fares of $30 from Dallas to destinations along the U.S. West Coast and $41 walk-up fares from Dallas to New York’s LaGuardia Airport were among those Virgin America cited from a recent review of airline data filed with the U.S. Transportation Department. There’s no indication when the battle might end, and “everyone is feeling the pain,” he said.

Southwest and American are reporting load factors, or the amount of seats sold, above 90 percent on some flights to Los Angeles and New York, with about half the tickets priced below $100, he said.

Fare wars are occurring in other markets, like Atlanta and Chicago. In Dallas, however, “I’ve never seen anything like it in my life,” Cush said. “Clearly, what we have is a market-share war going on in Dallas.”

American Airlines Group Inc., the world’s biggest airline, has said it won’t lose passengers to discounters and is creating a Basic Economy fare class that would offer a seat at a low base price, with no extras. The carrier declined to comment Thursday, while Southwest didn’t immediately comment.

I am certain this will end poorly for all parties involved.