The Southwest Effect is Working: Continental and United Cut Fares to Chicago

Yesterday, both Continental and United instituted a round-trip, non-stop airfare between Newark and Chicago in April of $197, including all taxes and fees, which is 40 cents less than the $197.40 fare announced by Southwest, again including all taxes and fees.

So the "Southwest Effect" has struck again! That's the phenomenon that finds the other airlines pressured to reduce their prices once Southwest begins flying on one of their routes. They do so immediately, and then find -- a few months later -- that they are unable to operate profitably on income of the sort enjoyed by Southwest (whose operating costs are among the lowest). So back go the airfares, upwards. The Southwest Effect lasts for a short time, but enables a great many of us to fly cheaply on several carriers for a short time.