Domestic airline ticket prices plunge

Airline ticket prices are falling at the biggest rate on record even though carriers have slashed capacity, new data show.

The average cost of a plane ticket within the U.S. plunged 9.1%, to $315, during the first three months of the year from last year’s fourth quarter, the largest quarter-to-quarter drop recorded by the Bureau of Transportation Statistics.

In fact, domestic airfares are cheaper than they were a decade ago, federal data show.

Passengers paid 5.1% less to travel on average during the early months of this year than they did during the same period in 1999, when fares averaged $332 -- not adjusted for inflation -- according to federal data. Inflation over that period was 28.9%. Second-quarter data aren’t yet available, although prices probably rose slightly during the busier summer travel months.


Still, fall discounts abound.

“It’s a flier’s market,” said Tom Parsons, chief executive of “I don’t know if we’re ever going to see a year like this one.”

Most carriers are offering bargains for travel between Aug. 18 and Nov. 18 in a bid to gain customers during a typically slow period.

Parsons said travelers can secure the lowest prices by booking Monday, Thursday or Friday flights.


“If you go past those dates, you will find sometimes the fares will be doubled,” he said.

Greater transparency provided by Internet travel sites has forced airlines to match the best deals offered by discounters such as Southwest, AirTran and JetBlue Airways.

Carriers also are eager to fill seats as they navigate a steep drop in business travel since Wall Street collapsed in September. Most have slashed expenses and grounded aircraft in response.

Except for Southwest, most carriers have introduced or hiked fees for a slew of services that once were free.


Even so, major airlines such as American, Continental, Delta and United all saw revenue declines of greater than 20% during the second quarter of this year.

Major carriers, including Southwest, are trimming capacity, and analysts said that prices eventually will stabilize as the cuts take effect and the economy picks up steam.