Flair Airlines has launched a new travel deal offering some direct flights for as low as one dollar.
The airline announced this week that travellers can now book northbound routes from Mexico, the United States, Jamaica and the Dominican Republic to Canada at a base fare of just one dollar.
The airline says it’s a gesture to give back to consumers. Some industry observers say they see it as more of a “gimmick” and question whether it’s sustainable.
Here’s what you, as a traveller, need to know.
‘Zero opportunity cost’
Eric Tanner, vice-president of revenue management and network planning at Flair, said that during the winter season many travellers head south to warmer destinations. The return flights from those destinations are often underbooked.
“We figured there was zero opportunity cost to that seat because it’s not very full to begin with,” he said. “We thought it would be nice to offer our customers one-dollar base fares.
The initiative isn’t a temporary promotion, he said. “We plan to make this a permanent aspect of our service moving forward.”
There will be no major changes to existing Flair flights. The $1 fares will apply only to select flights during specific times of the year. For instance, Tanner noted, “In the springtime, all of our northbound flights (returning to Canada) from the Caribbean and warm destinations are quite full but all the southbound flights are empty … you’ll probably see, in April, a lot of southbound flights available for one dollar.”
Sure, but how much do you actually pay?
While the campaign is eye-catching, the true cost of a one-dollar fare may extend beyond the advertised price.
For instance, assuming it’s Sept. 20 and you’re in a warmer destination, such as Las Vegas, looking to return to Calgary on one of these underbooked flights, the fare — excluding baggage or seat selection — would currently be about $15.
Additional costs include baggage: a carry-on would add $28, and a checked bag $42. Flair Airlines also offers bundles, seat selection and insurance packages for delayed or cancelled flights, all of which can increase the overall fare, depending on your needs.
What do observers say?
Although the one-dollar fare campaign is generating significant attention, many critics argue that it may not be a viable long-term business model.
Gabor Lukacs, president of Air Passenger Rights, a non-profit organization focused on traveller advocacy, expressed concerns about potential hidden fees. In an email statement, he questioned the possible ancillary charges associated with these low-cost tickets.
“I am also wondering if this is a well thought-out business strategy, or a last desperate move to generate revenue.”
In response to concerns about the sustainability of the business model, Tanner expressed optimism. He pointed out that the one-dollar fare is only being offered on select flights that would otherwise be underbooked.
“People can think and do whatever they want, but at the end of the day, Flair has grown into a nice business here and we’ve had a very successful summer,” he said, adding that the airline achieved a high capacity level on most flights, operating around 94 per cent. “We’ve flown more people than we ever have before … one-dollar fare is just a way to give back to those customers.”
According to Monday’s sales, about three per cent of Flair tickets sold were $1 base fare, Tanner said.
Have we seen this before?
Yes, similar low-cost fare campaigns have surfaced in the past, with notable examples including Ryanair’s famous ultralow fares in Europe and the historic collapse of Canada 3000 in the early 2000s. (Canada 3000 was an alternative low-cost airline, with fares much less than competitors such as Air Canada.)
Cheap airfare is “a gimmick that appears cyclically in the air travel industry,” said Steven Tufts, an associate professor at York University, focusing on labour geography.
He notes the strategy is designed specifically around the need to fill flights. “The logic is that if you have to fly with less than full load factor anyway, give away empty seats cheaply to gain market share from a competitor.”
Tufts pointed out that the issue with such base fare strategies is that they often do not reflect the true cost of air travel and can lead to instability. For example, Canada 3000 airlines was unable to sustain itself in a post-9/11 climate. In November 2001, Canada 3000 filed for protection under the Companies’ Creditors Arrangement Act (CCAA). Hours later the company grounded all of its flights.
It’s unclear how Flair’s airline competitors will respond to the new offer, but Tufts predicts some will offer similar discounts, while others may hold pricing stable to see how long Flair’s $1 flights last.
