Good news, everybody: Airfares are getting cheaper.
Now, before you fire up your favorite travel app and book a spring break getaway, there are a few things to keep in mind.
First of all, prices didn’t fall far. According to new data from the Department of Transportation’s Bureau of Transportation Statistics, average fare prices in the third quarter of last year fell about 6% from the same time period in 2014, dropping from an average of $396 to an average of $372. Keep in mind, however, that prices had spiked to a high point in the third quarter of 2014 — it was the “the highest average fare for any quarter” in more than a decade, after adjusting for inflation, the report states.
What’s more, that $24 travelers are “saving” isn’t a whopping difference, especially when you consider that you’re probably going to have to shell out more money if you want to check a bag, eat a snack, log onto wi-fi and so on. Airlines increasingly make their profits off ancillary fees and add-on charges such as baggage fees, and with very few exceptions the prices of those aren’t budging.
Then there’s the small fact that energy prices are hanging around levels nobody’s seen in more than a decade. “Benchmark jet fuel prices have fallen… 15% since December, recently trading at $0.85/gallon,” airline travel platform Hopper said. In case you haven’t been keeping track, that’s the cheapest it’s been since the end of 2003. When you look at it from that perspective, a 6% discount seems just a little bit stingy, especially when you consider that airlines hauled in a record-breaking amount of cash last year — almost $18 billion in profits in the first three quarters of 2015 alone.
After years of losses, airline industry consolidation has left around 80% of domestic air travel in the hands of just four carriers, which means that while prices on some flights might inch down, the airlines are still actively trying to bring them up on other routes. Even flying out of a bigger airport doesn’t give you an edge: The DOT found that fares are highest at the 12 biggest airports, with an average fare of $380 at the 12 airports that serve more than 5 million passengers.
And while the BTS data shows average fares, that snapshot can be misleading, according to Rick Seaney, CEO of the website FareCompare.com. Although airlines have dropped select prices on select flights to fill planes, they haven’t lowered their fares across the board, Seaney said. “This means airlines have had to slightly ‘yield down’ to get planes full,” he said. FareCompare recently pointed out that the airlines actually pushed through a small price increase right at the beginning of the year, while fuel prices were crashing and profits were hitting record highs.