If last year’s big question for airline passengers was “with fuel prices down, why are the fares still high?” this year’s question may be “how much can I fly before they go up again?” With airfares at their lowest in years, the airlines (and their shareholders) are not happy.
Right now, after a steady drop since mid-2015, airfares are at their lowest point, adjusted for inflation, since 2010, and about 8% lower than last year. Of course, the airlines aren’t starving; those lower fares are bulked up by billions in fees that have only grown since then.
The slide in fares has brought out more passengers, and the airlines, in general, have been quick to accommodate them with new routes, and more seats on existing routes. The growth in capacity has outmatched the growth in sales on many routes, which leads to more fare sales and reductions on heavily-competed routes.
And that’s where the tide may start to turn, as the airlines rein in capacity, as they did several years ago. That could include dropping out of some competitions, slowing expansion, retiring more older planes. Those won’t happen overnight, though there may be fewer flash sales ahead, so this year may be the year to go. And go.
