Wondering where the price of airline tickets is headed? Consider these three facts:
- The economy is in recession, undermining consumer demand for travel and other non-essentials.
- While the airlines have cut flights, they haven't downsized as quickly as demand has fallen. Planes are flying emptier and emptier.
- The price of fuel—a key determinant of airlines' total costs—has dropped from $147 a barrel in July to less than $50 today.
Those ingredients are a surefire recipe for widespread discounting—bad news for the profit-starved airlines, but good news for price-conscious travelers.
That's what I've been reporting for several months. But aside from random fare sales and anecdotal reports from travel consumers, it's been difficult to confirm, much less to quantify.
Thanks to Travelocity, we have some real-world data to consider.
As one of the largest online travel agencies, Travelocity is a good proxy for the overall U.S. leisure travel market. According to a report issued by Travelocity this week, "the average domestic airfare for spring is down $24 as compared to the same time period in 2008—from $393 to $369." That's a decrease of about 6 percent. And even better deals were available on some routes. Among the popular destinations with price declines of 10 percent or more were the following:
- Denver - 13 percent
- Los Angeles - 16 percent
- Salt Lake City - 16 percent
- San Francisco - 15 percent
- Seattle - 10 percent
- Chicago - 17 percent
- Atlanta - 10 percent
- Jacksonville - 13 percent
- San Antonio - 16 percent
- Tucson - 11 percent
In contrast to domestic prices, international fares were flat overall, averaging $651 this year versus $648 last year. But there were bargains to be found. The price of Dublin flights fell 13 percent; Guatemala City flights were 17 percent cheaper; and Belize City flights were down 18 percent.
So we know that you'll probably pay less for a domestic ticket today than you would have paid a year ago. The question is whether fares have bottomed out and will increase from here on out, or if prices will slip further, creating even better bargains for those who wait.
I posed that question to Travelocity's senior editor, Genevieve Shaw Brown. She expects that demand will continue to fall, and, as a result, "the airlines will have to continue lowering prices to fill those empty planes."
What say you, fellow traveler? Do you plan to buy a ticket at current prices, or wait for further cuts? Post your comments below.