I recently booked a $99 round trip ticket for an upcoming business flight between OKC and Denver for January 2017. The airlines have been slicing prices lately and it turned out to be the lowest air fare I have paid in quite a while.
The most interesting thing underlying this cheap fare is that airline ticket pricing behavior has changed in three important ways the past few years. The figure below illustrates this new pricing behavior using the index of airline fares maintained by the Bureau of Labor Statistics, without adjustment for seasonal variation in price.
The three changes are:
- Ticket prices are now much more volatile throughout the year with wider swings between the high and low prices of the year. Swings in the average price of 10-15% are now common, with much larger swings on individual fares. This likely presents more opportunities to find a good deal, as well as more opportunities to get stuck with very high prices on a last-minute ticket.
- Ticket prices have been slowly, but steadily, falling the past few years. At least a 10% drop in the average ticket price between 2014 and 2016. Falling oil prices do not seem to be playing much of a role in the steady decline.
- A new seasonal pattern has emerged that may present both opportunities and risks for air travelers. The old pattern was highest prices in the early Spring and Summer, and lowest prices in deep Winter. The new pattern is much different. Ticket prices remain the most expensive in early Summer (typically peaking in June) but tend to bottom at the lowest prices of the year in September. Hence, part of the reason for my recent $99 deal. Prices tend to rise again after September, peaking in November but at levels well below the highs in June. Prices then fall off sharply in December before bottoming again in January.
This new pattern in air fare pricing has been remarkably consistent since 2014. If the pattern continues to hold, the new advice in finding cheap fares may be to buy your tickets in September or January and avoid buying in June at all costs.
Hopefully, knowing about these changes will save you a few dollars somewhere along the way.