Airfares drop along with fuel prices, summer close

The fall, after summer vacations and the kids are back in school, historically is a good time to snag bargain airfares - at least on certain competitive routes.

"The first week of September is typically a good time to look for a ticket because the summer madness is over," said Peter Abzug, spokesman for the Airlines Reporting Corp. (ARC).

Online travel sites, such as Airfarewatchdog, Kayak, and Expedia, on Thursday showed round-trip fares on a handful of airlines as low as $89 round-trip from Philadelphia International Airport to Dallas-Fort Worth for flights on Wednesday, Sept. 23, and returning one week later, on Sept. 30.

Fares on those dates were as low as $304 round-trip between Philadelphia and Los Angeles, $80 from Philadelphia to Chicago O'Hare, and $153 round-trip to Miami from Philadelphia.

"Philadelphia is one of the cities where we have seen super-low fares on routes that compete with Spirit and Frontier Airlines," said George Hobica, founder and president of Airfarewatchdog.com.

"Most of these are for September through October or mid-November, in some cases through Dec. 14, just before the Christmas holiday. Certainly not for Thanksgiving when the fares are still high," Hobica said.

Tuesday, Wednesday, and Saturday are the cheapest days to fly. Friday and Sunday are the most expensive.

Major airlines, including Southwest, are matching, and, in some cases, beating Frontier and Spirit ticket prices, Hobica said.

"It's happening for a couple of reasons. One is the slower fall season," he said. "The legacy carriers feel like they can lower fares because they are saving so much on oil."

Indeed, jet-fuel costs per gallon were down 32.5 percent for domestic flights and 28.9 percent for international flights in the first six months of this year compared with the same period in 2014, according to the U.S. Bureau of Transportation Statistics.

Seth Kaplan, managing partner of Airline Weekly, an industry publication, said the lower airfares were a direct result of cheaper fuel. Airlines are growing a little again, "putting more seats into the marketplace."

"In the past few years, it was really hard to get a bargain. As long as fuel remains cheap, there's going to be more" lower fares "because the industry will continue growing," Kaplan said.

"Cheaper fuel encourages airlines to grow, and then that growth - all those new seats - push down airfares," he said. "You tell me what's going to happen to fuel prices over the long run, and I'll tell you what's going to happen to airfares."

The big four carriers - American, Delta, United, and Southwest - are sending lower-fare rivals Frontier and Spirit a message: " 'We're not going to sit down and take this. We are going to match you dollar for dollar,' " Hobica said. In some cases, the large airlines undercut Spirit and Frontier, which charge extra for a carry-on bag in the overheard bin and for water and a soft drink.

Airline fares fell 5.6 percent in the 12 months that ended July 31, according to the Labor Department's Consumer Price Index. Fares dropped 7.5 percent in the 12 months before April 30.

Passenger yield, which is the average airfare paid by customers to fly per mile, was down 2.2 percent in the first six months this year on domestic flights, and down 6.3 percent on international flights, according to the trade group Airlines for America.

While industry data suggest that fares are lower year-over-year, "depending upon where you want to go," fares on some routes are higher, said Helane Becker, airline analyst at Cowen & Co.

"There are some markets where fares are lower - highly competitive markets like Dallas. But I think the biggest impact has already been felt," Becker said, "and I think fares have started to push higher because capacity [seats and flights] is not growing as rapidly as it was."

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