The biggest driver of airfares is competition. And budget airlines have certainly ratcheted up that competition.
In 2008, low-cost airline carriers only accounted for 4% of American travelers. Since then, that share has expanded to 15% and it continues to grow. With those kind of numbers, mainstream airlines are forced to compete with those budget tickets.
Air travelers from the D.C. area also benefit from the fact that we are among the major metro areas with competing airports.
鈥淲hen you鈥檝e got three major airports within an hour of each other, and you have every airline and their mother flying in and out of these airports, guess what? You have a lot of competition,鈥� said Willis Orlando with .
Willis said the term 鈥渁verage airfare鈥� is also irrelevant. The only fare that matters is what you pay. So if you paid $400 for your ticket and the woman sitting next to you paid $1,200 for the exact same flight, her fare may have pushed the average price up, but doesn鈥檛 it change anything about what you paid.
You can鈥檛 book 鈥渁verage鈥� fares. You can only book 鈥渁vailable鈥� fares. And those prices change more frequently than anything else consumers buy.
鈥淚f the average price of a gallon of milk is $3.88, chances are you are not paying more than 25-cents more 鈥� or less 鈥� than that. If the average price of a gallon of milk goes up by a dollar, you are not going to find a flash sale on milk for $1.25. It is just not going to happen,” Orlando said. “But when it comes to airfares that鈥檚 not the case.鈥�
That said, average fares have risen recently 鈥� about 5% in the past month, and about 12% in the last year. Longer term, it is still cheaper to fly, especially when you factor in inflation.
鈥淥ver the last two years, fares are actually down about 23%. Over the last 10 years, they are actually down about 40%,” Orlando said. “It may seem like airfares are getting higher, but it is very, very relative if you鈥檙e looking at average fares.鈥�
Scott鈥檚 Cheap Flights believes cheaper airfares aren鈥檛 likely to go away long-term. Airlines make the majority of their revenue on things other than economy airfares, such as expensive business and first-class seats, selling frequent flyer miles, credit cards, corporate contracts, cargo and, of course, all of those additional fees.
As a result, Orlando says airlines are less reliant on economy airfares and will compete with budget carriers who pull down economy class ticket prices.
