Perhaps it’s time to book that dream vacation.
Not only are some states seeing their lowest gas prices in 12 years, but now the average domestic airfare is as cheap as it’s been in six years.
According to the U.S. Department of Transportation’s latest quarterly airfare data, released Wednesday, the average domestic airfare fell to $372 in the third quarter of last year. That’s down 6.2 percent from $396 in the third quarter of 2014.
When adjusting for inflation, the average domestic fare has not been this low in the third quarter since 2010, when it was $370.
CNN Money reports that expansion of budget airlines has helped fuel the decline in airplane ticket prices.
The founder of Airfarewatchdog.com, George Hobica, tells CNN that major airlines are being forced to reduce their rates to compete with low-cost carriers like Spirit and Frontier:
“The major airlines are flying scared and looking over their wing tips at these low-cost carriers that are definitely taking up market share, despite their horrible reputation. … On some routes, they are matching prices dollar for dollar, so we are seeing fares 50 percent lower than a few years ago.”
Low oil prices have also helped airlines.
According to Department of Transportation data, domestic airlines paid $1.44 per gallon in December. That’s down from $2.32 in December 2014 — and the lowest it’s been in any month since March 2005, when domestic airlines were also paying $1.44.
In light of airlines paying less for fuel than they have in more than a decade, however, Money calls reports of cheaper airfare “misleading”:
When you look at it from that perspective, a 6 percent 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.
The publication also points out that the $24 difference between the average domestic airfare in the third quarters of 2015 and 2014 “isn’t a whopping difference” for passengers, as that savings could essentially be nullified by fees for checked bags, snacks and Wi-Fi.
Money reports that, with few exceptions, the prices of such fees “aren’t budging.”
If you’re considering that dream vacation regardless, check out “17 Proven Ways to Save on Travel.”
What’s your take on the decline in airlines’ oil prices and the decline in airfare? Share your thoughts below or on Facebook.