Airfare Costs Continue Their Descent

What's Hot


How to Cut the Cable TV Cord in 2017Family

8 Major Freebies and Discounts You Get With Amazon PrimeSave

8 Creative Ways to Clear ClutterAround The House

Study: People Who Curse Are More HonestFamily

This Free Software Brings Old Laptops Back to LifeMore

Pay $2 and Get Unlimited Wendy’s Frosty Treats in 2017Family

Protecting Trump Will Cost Taxpayers $35 MillionFamily

The 3 Golden Rules of Lending to Friends and FamilyBorrow

6 Reasons Why Savers Are Sexier Than SpendersCredit & Debt

Resolutions 2017: Save More Money Using 5 Simple TricksCredit & Debt

Porta-Potties for Presidential Inauguration Cause a StinkFamily

Tax Hacks 2017: Don’t Miss These 16 Often-Overlooked Tax BreaksTaxes

5 New Year’s Resolutions That Will Pay Off 10 Years From NowCollege

Last year, the price of an airline ticket slid to its lowest level since 2010. What is behind the plunge?

Airline ticket prices have continued to head south, the federal government’s latest data show.

The U.S. Department of Transportation’s airfare report for the fourth quarter of 2015, which was released Wednesday, shows that the average domestic airfare:

  • Decreased from $396 in the fourth quarter of 2014 to $363 in that period last year (8.3 percent) — the lowest fourth-quarter level since 2010.
  • Decreased for the year from $392 in 2014 to $377 last year (3.8 percent) — the lowest yearly level since 2010.

These figures are adjusted for inflation and are based on round-trip ticket values unless a customer did not purchase a return trip. They do not reflect any additional taxes or fees, such as baggage fees.

CNN Money reports that the decline in ticket prices is largely due to declining oil prices, although the two aren’t directly related.

Jeff Klee, chief executive of CheapAir.com, explains in CNN’s report:

“Airlines don’t set their prices based on their costs to fly the planes; they set them to maximize their revenue. No matter how high or low their costs are, they will sell their seats for the highest that the market will bear.”

When oil is cheap, it boosts airline profits. The airlines then use the added profits to expand their companies by buying better planes and adding new routes, CNN reports.

Buying more fuel-efficient planes reduces flying costs. Adding new routes puts pressure on other airlines to decrease their prices to compete, which is how consumers indirectly benefit from falling oil prices.

George Hobica, founder of Airfarewatchdog.com, tells CNN that major airlines are now matching the low prices of budget airlines that have been adding new routes:

“It’s a pretty good time to fly.”

What’s your take on airfare trends? Let us know what you think by leaving a comment below or over on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!

💰🗣📰

Read Next: 12 Ways to Avoid Obnoxious Hotel Fees

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,766 more deals!