People have wondered when the dip in oil prices would result in lower airfares and it it seems like it’s happening right now. The airfare wars are back, at least to some extent, according to newsletter Airline Weekly, which reports that “this is the big break consumers have been waiting for in response to lower fuel prices.”
Although the break in airfares is welcome by fliers everywhere, it is nowhere like it was in the 1980s where airlines aggressively battled each other to attract customers - even if it meant taking huge losses.
In the ‘80s, airlines were focused on being the largest carrier of a particular route, and they would lower their fares in order to make that happen. It often meant losing money, and the practice was destructive to the industry. Today, airlines know better and the airfare wars are structured to cause less damage.
Despite offering somewhat lower fares, airlines still collect billions of dollars from fees for checked baggage and inflight services - amenities that were included in ticket prices back in the ‘80s.
Today, the price of oil is the least it has been in 6 ½ years. Therefore the airline industry is saving billions of dollars in fuel and thus able to offer lower fares to its customers without taking a hit on profits. Airlines have also added larger planes to their fleets and have filled more seats in existing planes.
The result of these changes is that there are 3.4% more seats than compared to a year ago. Airlines have had to lower fares in order to fill these seats.
Presently, travellers can find airfare as low as $150 roundtrip for flights between New York and Los Angeles. Roundtrip flights between Chicago and Boston can be found for $80 and roundtrip flights between San Francisco and Las Vegas are $67 on some carriers.
These low fares will likely not be found during holidays or busy times of the week such as Monday, Thursday and Friday. The lowest fares are often found on slow travel days such as Tuesday, Wednesday and Saturday. The lowest fares continue to be offered by Southwest Airlines, Frontier Airlines and Spirit Airlines.
However, the largest airlines such as American Airlines are now matching the fares of their low cost competitors.
George Hobica, founder of the travel deal website AirfareWatchdog.com states that “[The bigger airlines] are trying to force [their low cost competitors] out of the market and they have the power to do this because they are making record profits.”
Prices are still greater than they were in 2011, 2012 and 2013, but fliers are happy with any reduction in the exorbitant fares of late. Since the small dip in airfare prices is nothing compared with the 31% savings airlines have saved in fuel costs since the beginning of 2015, travellers hope the decrease in ticket prices will continue.