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Are Dirt-Cheap Flights the Way of the Future?

SmarterTravel

Wow Air, Germanwings, and Norwegian have all recently offered fares under $100 from the United States to Europe. Are these dirt-cheap fares game changers that will make trips across the Atlantic affordable for budget-minded travelers? Or are they too good to be true?

Those are the questions everyone is asking after the latest budget airline news: According to Reuters, the chief executive officer of Norwegian Airlines Air Shuttle ASA, Bjorn Kjos, said in an interview that his airline plans to start selling one-way tickets from the U.S. to Europe for a ridiculously low $69 in 2017.

Reuters says Kjos plans to keep the costs low by flying to Edinburgh, Scotland, and Bergen, Norway, from inexpensive airports like New York’s Westchester County Airport and Connecticut’s Bradley International Airport (the government would have to set up U.S. Customs stations at those airports). Norwegian currently operates in eight cities in the continental U.S.

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While the airline’s CEO talked only about flights to Edinburgh and Bergen in his Reuters interview, the airline tells Yahoo Travel that its ultimate goal is to reach several other European cities from the U.S. In an email, Norwegian spokesman Anders Lindstrom tells Yahoo Travel: “Norwegian’s intention is to launch routes between the western coast of Europe (for instance: Bergen, Norway; Gothenburg, Sweden; Aalborg, Denmark; Bremen, Germany; Aberdeen, Birmingham and Edinburgh, UK; and Bilbao, Spain) from smaller U.S. airports.”

As of late, it seems European budget airlines have been tripping over themselves trying to offer cheap transatlantic travel from the U.S. Earlier this year, Iceland-based Wow Air offered flights from Boston to Reykjavik for $99. Eurowings, a subsidiary of Germany-based Lufthansa, has also announced plans to start long-haul flights.

Could this be the beginning of a long-term price war that could bring down the price of a round-trip transatlantic fare?

Not exactly. Here’s why your dream of flying to Europe for less than $100 may not come true:

1. Just because your fare is $69 doesn’t mean you’ll pay $69

The first problem is that, in the end, these much-discussed, seemingly rock-bottom fares bear little resemblance to what passengers actually pay. Norwegian’s proposed $69 fare, for example, is only one-way. For a flight back to the United States, you can expect to pay a bit more.

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Plus, AirfareWatchdog.com’s George Hobica sees a potential cost issue with the flights to Edinburgh. “The U.K. adds about $100 in passenger duties on flights leaving the U.K.,” he says. “And there are all the other taxes, government fees, and surcharges. Even a $69 one-way fare will end up costing $200.”
Kjos even admits the total average cost for a round-trip flight would be closer to $300 round-trip.

Still, $300 is still a very good fare to Europe. But there’s another issue:

2. The Fees

Where there are budget airlines, there are more fees: Mashable observes that, unlike many major air carriers that traverse the Atlantic, Norwegian charges $50 for your first checked bag and doesn’t offer free food and drinks. Making a seat reservation costs you money, too. So even if you book a super-low fare, expect some sticker shock should you decide to add such amenities that you may be used to getting for free from the big boys.

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3. There’ll likely be only a few $69 seats

Then there’s the issue of exactly how many of the cheap seats will actually be available on a flight. “Either [Norwegian] will tack on lots of fees or sell just a few seats at the $69 fare and the rest at much higher prices,” predicts Hobica.

How many seats will Norwegian offer for that $69 price? It isn’t saying … yet.

“A considerable amount of $69 fares would be available,” Lindstrom tells Yahoo Travel, “but we can never reveal exactly how many tickets of any specific fares for competitive reasons.”

4. These discount fares are often temporary

David Parker Brown, founder of AirlineReporter.com , says: “We might see promotional fares for [under $100], but it’s unlikely that we would see an airline last long offering fares that low.”

“The $69 fare Bjorn Kjos (our CEO) mentioned would be the introductory fare,” Norwegian’s Lindstrom tells Yahoo Travel. In airline speak, “introductory” means “temporary.”

In fact, these cheap fares to Europe will likely vanish, if recent history is any guide.

5. We’ve seen this in-flight movie before

This isn’t the first time we’ve seen airlines offer cheap, headline-grabbing fares that lasted as long as the headlines. Wow Air, which offered the $99 flights to Europe earlier this year, is now offering its one-way Boston-to-Reykjavik fare for $186—quite a bit more than $99 (for a round trip in January, Yahoo Travel was quoted a fare of $350.39). The Wow Air flights connecting to London’s Gatwick Airport topped $574. For its part, Norwegian currently offers a $446 round trip from New York’s JFK to Gatwick during that same period (but unlike Wow Air’s flights, Norwegian’s to England are direct).

Of course, the budget airlines (pre-fees) were still cheaper than the $695 New York-London fare we got from Delta for the same period.

So while budget airlines tend to come in lower than their competitors, those super-low attention-getting fares may just be a tease. “This may just be a publicity ploy,” agrees Hobica in response to Norwegian’s news about the $69 fare.

In fact, Norwegian’s new fares happen to kick in just around the time the airline plans to debut its spiffy new Boeing 737-MAX planes. “This longer-range aircraft will allow us to open up an endless number of routes currently not served by other airlines,” Lindstrpm of Norwegian tellsYahoo Travel. The first five of the 100 B737-MAX planes Norwegian has ordered will start flying in 2017. Norwegian plans to start selling its low fares in late 2016—just in time for the new planes.

While no one seriously thinks these $69 fares will last forever, Norwegian tells Yahoo Travel its new planes can allow it to keep offering transatlantic fares that are lower than those of the big boys. “When we introduce the new Boeing 737-MAX to our fleet, we will be able to bring fares down even further,” Lindström tellsYahoo Travel. Boeing has said the operating costs for its B737-MAXs are about 8 percent lower than its competitors. Norwegian says between that and its other efficient new planes (the airline also operates Boeing’s new 787 Dreamliner), it can pass savings on to customers.

“Modern fleets is one of the key success factors to why low-cost airlines worldwide are doing so well,” says Lindström. “We also have considerably lower operating costs than other airlines flying between the U.S. and Europe, which will sustain our low fares in the future.”

Lindström also says Norwegian and Europe’s other budget carriers have forced the big “legacy” carriers to reduce fares, although “their fares are still high.” David Parker Brown tells Yahoo Travel that you probably shouldn’t expect the larger legacy carriers to reduce fares much lower to compete with these low-cost competitors.

“These low fares either never happen or they are short-term ways to garner attention,” Brown says. “If the $69 fares happen, I doubt U.S. airlines would match those fares, but are more likely to reiterate other benefits (number of routes, amenities, discounts, etc.) that they might offer.”

So it’s entirely possible that these low $69 fares will become a reality, at least temporarily and for some passengers. Just remember that in these ridiculously low fares that get travelers in an uproar, there are enough caveats to fly a Boeing through.

—Sid Lipsey

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This article was originally published by Yahoo! Travel under the headline Are Dirt-Cheap Flights the Way of the Future?. It is reprinted here with permission.

(Photo at top: Thinkstock/iStock)

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