Pinpointing the best time to purchase a plane ticket is an inexact science at best.
But if you’re planning a trip, now really might be a good time to buy.
According to the July Consumer Price Index, airline fares dropped 8.5 percent from June to July, the biggest single month decline since December 1995. Overall, airfares are down 5.6 percent over the past 12 months.
Fares could get even cheaper later this month and into early September as the busy summer travel season comes to a close, MarketWatch reports.
The drop in ticket prices is likely due to the recent steep decline in oil prices.
“Some analysts also speculate that a federal probe of possible industry collusion on ticket fares may have caused airlines to restrain prices,” MarketWatch said.
Although cheaper airfare is a win for consumers, it’s not good news for airlines, despite the fact that they’re raking in record profits, The Wall Street Journal reports.
Costs have dropped sharply for airlines, pushing profits higher. But a decline in ticket prices has hurt the companies’ unit revenue, which measures the amount of money taken in for each passenger flown a mile. Investors remain fixated on that metric, which has slumped this year and may not turn around until 2016. They are watching for signs that airlines are responding to better times by over expanding, setting up another downturn.
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