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Low Oil Price Improves Deals for US Air Travelers
People, Travel

Low Oil Price Improves Deals for US Air Travelers

With the price of oil having plummeted to its lowest level in nearly seven years, airlines have gained more flexibility to compete on fares, a result that ultimately benefits travelers.
AP reported that cities across the US are experiencing jaw-dropping low off-peak fares. Customers can fly roundtrip from Chicago to Boston for as little as $80 in some cases.
“This is the big break consumers have been waiting for in response to lower fuel prices,” Airline Weekly Managing Partner Seth Kaplan told the AP.
Carriers have saved as much as 31% on their fuel costs since the start of 2015, leading to an average domestic roundtrip ticket cost (including taxes) of $494.12 through the first seven months of the year. The figure represents a 1.1% ($5.41) decline from the same period in 2014. However, the average ticket price today remains higher than it was between 2011 and 2013.
With profit easier to come by and more seats to fill on each plane, major carriers American Airlines, Delta Air Lines and United Airlines have been able to match fares offered by low-cost and ultra-low-cost carriers like Southwest Airlines, Spirit Airlines and Frontier Airlines.
AirfareWatchdog.com founder George Hobica said the major carriers “are trying to force low-cost and ultra-low-cost airlines out of the market and they have the power to do this because they are making record profits”.
Since ultra-low-cost airlines like Spirit and Frontier charge passengers extra for almost everything outside a seat, including baggage bins and a bottle of water, the major carriers are able to offer travelers a better deal by matching those fares.
Considering the big three US carriers combined to record $6.6 billion in profits during the first half of 2015, it’s clear that they have much more leeway to drop fares compared to Spirit and Frontier, each of which transports fewer than 2% of all domestic passengers.
While there are plenty of deals to be had as airfare competition heats up, they are relatively limited to slow travel days and off-peak hours when demand drops off.

 

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