Flight Fare Prices Skyrocketed Following Southwest's Meltdown. Was It Price Gouging?
As if canceled flights and lost luggage weren't enough of a hassle, would-be Southwest Airlines passengers faced another hurdle to their holiday travel this week: High fares on other carriers.
Southwest announcedon Thursday it would resume normal operations this weekend, after canceling roughly 13,000 flights in the last week. Many of those who tried to find flights on different airlines encountered sky-high prices — in some cases, triple or quadruple the rate for the same route in the last few months.
Take, for example, a one-way ticket from Chicago to Denver, two of the cities impacted the most by Southwest's operations errors. Those Googling on Thursday for an afternoon ticket would've found the best price at Delta Air Lines: $599. A week ago, the price of the same flight was $139.
But even routes that weren't affected by the storm, like a flight from Los Angeles to San Francisco, were starting at $415 on United, more than four times higher than the cost three days ago.
The trend was strong enough to raise questions, even for those who weren't slighted by Southwest. Were airlines taking advantage of weary travelers?
Before you start throwing around the term "price gouging," though, consider what some experts told NPR this week.
Yes, fares are super high. But so is demand
"This kind of last-minute-booking price spike is actually fairly normal," said Sally French, a lead travel writer for NerdWallet.
"Unlike with other forms of travel where you might find a great last-minute hotel room or cruise cabin that the company is trying to fill, airfares rarely offer last-minute deals."
Kyle Potter, executive editor of Thrifty Traveler, said last-minute fares are always more expensive in part because, at this late in the booking game, the supply of open seats is incredibly low.
"Planes are routinely 90-95%, even 100% full on a normal day these days. And demand right now is about as high as it gets. [We're] heading into the New Year, plus the storm has added to that," he told NPR.
Not to mention Southwest's relative size: The airline is one of the largest carriers in the country. That means that hundreds of thousands of Southwest customers were suddenly stranded this week, all simultaneously searching fare sites as they snaked through rebooking lines, texting their families who were at home doing the same.
"I really think part of what we're seeing play out here is less about the price itself and more about record-high awareness of these pricing patterns," Potter said. "Hundreds of thousands, even millions, of Americans are suddenly scrambling to find a last-minute ticket on another carrier. Plenty more are just looking out of curiosity."
Laura Lindsay, a global travel trends expert for Skyscanner, agrees that the sudden change in inventory as travelers snap up seats is having an impact.
"Airlines use complicated algorithms to set their pricing ... The one factor which outweighs all of these and is the ultimate determiner for the price paid: demand," she said.
"Flight prices are all based on supply and demand, and when demand is high, so are the airfares."
What you're seeing on that search tool might not be an economy seat
Potter said there's also an "alphabet soup" of fare class offerings, with each coming with their own rules, restrictions and, yep, price.
"Airlines regularly pull certain fares from sale in the waning days before a flight — they don't want to offload their cheapest fare classes last minute and may need to keep some seats open for crew, upgrades, flight changes, etc.," Potter said.
Potter said a good practice is to check your eye-popping fare with the airline's website. Sometimes clicking through might reveal it as a business or first-class ticket.
You should also check the options again later: Sometimes an airline will add back a cheaper economy seat when it finalizes crew schedules or flight changes.
Airlines said they'd limit fare increases through the weekend, but the details are fuzzy
As Southwest's cancellation wave drags on, airlines including American, Alaska, Delta and United all said they'd impose fare caps domestically for the next few days.
NPR requested specifics from the airlines, including a list of the cities affected and ceilings for the caps. None elaborated on their policies. A lack of price transparency is standard operating procedure for the highly competitive aviation industry.
"Fare caps are built into Alaska's everyday pricing model," said the West Coast-based airline. "In addition, we have further lowered fares in select cities and we're doing everything we can to get guests, whose travel was impacted by winter storms, to their destinations."
United Airlines said it capped fares through Saturday with a focus on "domestic and Latin American markets served by Southwest."
American Airlines said it first notified customers of the price cap rules via Twitter replies to screenshots showing $1,000 price tags for flights.
We’re doing our part to help get people where they need to be and we’re putting a cap on fares for select cities.— americanair (@AmericanAir) December 28, 2022
In an interview with Nexstar Media, U.S. Transportation Secretary Pete Buttigieg said he was working with other airlines to ensure they're offering affordable fares, but acknowledged that his power to enforce such fares is limited.
"We're going to look at every authority that we legally have, but, again, we're really expecting airlines to go beyond the legal minimum and do the right thing," he said. "It shouldn't take an enforcement action from our department in order to get people taken care of."
Those who suspect airlines are mistreating them can file a consumer protection complaint with USDOT. The department was unable to provide NPR with specific complaint numbers for the last week, but described the number as "surging."
One more thing: Don't bet on Southwest reimbursing your fare if you switch airlines
If you do decide to pay up for a new airline ticket, keep in mind that Southwest has no legal obligation to reimburse you for the difference.
Southwest has said it'll honor "reasonable requests" for reimbursement, but it's unclear what might constitute "reasonable." (Customers looking to make those reimbursement requests should use this self-service portal, the company has said.)
This summer, Southwest told USDOT it would pay for meals, hotel accommodations and ground transportation for customers facing overnight cancellations. But it didn't agree it would cover rebooking on another airline when some of its competitors did.
There's nothing stopping Southwest from changing any of those policies now.
The Biden administration has proposed new rules around airline fees, but as it currently stands, U.S. law currently only requires airlines to offer a full refund after a cancellation.