Airfare prices are complicated. As serious travelers have noticed, the price to fly has gone up and up in the most recent years. It doesn’t seem like too long ago that we were enjoying an era of cheap or at least reasonably priced airfare, so what happened? Why is airfare so high?
So how you can get the best airfare when you fly? As it turns out, there’s a pretty complicated amount of information that contributes to current air prices.
The more you understand about this information, however, the more money you can save the next time you travel.
Why the Rise in Airfare Prices?
For one thing, the last several years have seen a ton of industry consolidation. Today, there are only four major US airlines from which you can choose. Canada’s only got two, and Europe is mostly dominated by Lufthansa, KLM, and Air France.
Simply put, when there’s less competition, prices go up.
The number of airlines is dwindling as the industry has been plagued with bankruptcies and mergers.
Another significant factor is the fact that the price of airline fuel has gone sky-high (pun intended).
To give you an idea as to how high prices have risen, airline fuel was holding steady at 55¢ per gallon in 1996. Today it’s $2.97. It doesn’t take a business degree to understand where that cost might go. (Hint: it’s to you, the customer!)
The attacks that took place on September 11th were another important contributor to the rise in airfare, as well. Airline security has increased significantly, and overall air travel declined post-9/11, leading to the bankruptcies and declines in sales that precipitated the recent increase in pricing.
As Lifehacker explains:
“…following 9/11 and the recession, demand fell and to compensate, airlines reduced both the number of routes they offered and the frequency of their flights. They did this to save money and fly fuller planes.”
Finally, you’ve got your security fees and taxes raising airfare prices, as well. They break down as follows:
- September 11th Fee of $2.50
- Passenger Facility Charges of $4.50 per segment
- US Federal Domestic Segment Fee of $3.70 per segment
- US Travel Facilities Tax of $8.30 per direction
- US Immigration User Fee of $7
- US Customs User Fee of $5.50
- US APHIS User Fee of $5.00
- US International Transportation Tax of $16.30 per arrival or departure
- Foreign Government Security/Tourism/Airport/International Transportation Taxes and Fees up to $290 (depending on your destination)
If it seems like taxes and fees make up about half the total cost of your ticket, you might not be too far off. All hope isn’t lost, though, as there are plenty of ways you can makes sure you don’t spend more than you need to.
How You Can Save Money the Next Time You Fly
The trick to snagging the best airfare prices is all about flexibility and booking well in advance. The fluctuation of airfare costs typically depends on competition, supply, demand, and oil prices.
Obviously, competition and oil prices will have the biggest overall effect on prices. The two factors in the middle, however, are the ones that you can use to your advantage when you’re looking for the cheapest flights. So pay attention to supply and demand.
Since business travelers often book at the last minute and many don’t pay for their flights, airlines will typically raise prices within a month or so of departure. By booking far in advance, you can avoid this price-gouging.
You can also avoid paying a lot by flying mid-week, late at night, or early in the morning when there’s less demand.
When it comes to saving money on airfare, your best best is to shop well in advance and remain as flexible as possible.
So how do you save money on airfare in this day and age? Do you save more using sites like Kayak or buying directly from the airline? Share your travel tips in the comments!
And after you’ve booked your next vacation, check out the Scambook Blog’s 5 Tips to Reduce Jet Lag.
See Also
FAA Changes Rules for Electronic Devices on Planes
Air Travel Safety Notice: TSA to Continue Ban on Small Knives on Airplanes
Southwest Airlines Ticket Glitch Nightmare Has Happy(-ish) Ending
I was talking to a friend a while back who used to work for a well known travel agent. She quit her job because she couldn’t handle the dishonesty that was being forced upon her. The agency policy was to evaluate the potential spending power of the individual and then quote prices accordingly. If a businessman walked in wearing a suit and tie they would assume that he had money to spare and would inflate prices accordingly. If a backpacker walked in, then the prices would be reduced to make the sale. They would also ‘con’ the traveller using terms like “This is a special fare which won’t be around long so you’d better book quickly if you want this fare”. Interestingly, what my friend told me was exactly what happened to me when I was booking a holiday. I walked into one agency after work wearing my suit and was quoted a price for a holiday in New Zealand. The following weekend I went into another agency (same travel agent) wearing dirty jeans, as I was working in the backyard, and the quote was over $800 lower for the same flights, same dates and same itinerary. I my experience, no travel agent has ever matched the prices that I could obtain booking flights, accommodation and activities myself over the internet. So it definitely pays to shop around.
Wow, sounds like it pays to be clever, too!
What a great story, Phil. Definitely helps to consider all your options when you’re thinking about traveling. Thanks for sharing!
I find it’s a good move to do research on flights over the internet, record the fares and details you’ve chosen, then go to a travel agent and ask them to equal or beat the price, and do the booking.
Best of both worlds.
I use my own company, which slashes the prices of flights, hotels, properties to rent, etc.
I have flown SEVERAL times, and tried to save as much money as possible…but I honestly wish I would of been introduced to my company much earlier. I would of saved thousands, literally.