Travelers’ Delight: Falling Oil Prices Mean Cheaper Air Fares
Falling oil prices will cause dramatic drop in plane ticket prices in the coming months, airline industry experts say.
Experts say fuel makes up about a third of an airline’s costs. With oil and jet fuel costs down two-thirds since last year, airlines can expect to reduce their overhead by about 20%.
“We’ve seen typical domestic prices drop about 14% over the past year,” Patrick Surry, chief data scientist at Hopper, the airfare prediction app, told AFP.
“The drop in fuel prices is a major factor, along with increasing competition from low cost carriers, both domestically and internationally,” Surry said.
Aside from plummeting oil price in world market, stiff competition is also seen as to melt down once stubbornly high fares of airfare tickets. According to AFP, the said consumer bonanza effect is now felt in some US travel destinations like Chicago, New York, Los Angeles, and San Francisco, cities where competition is stiff.
Good deals can also be had on routes to the southwestern US energy meccas of Houston and Dallas, where the slowdown in the oil business has led to discounted air fares.
Travel industry experts said that the relatively low prices were likely to continue throughout 2016.
Just in time for the Olympic games, a 23% drop in the price of air fares to Rio is also expected to happen which will benefit both consumers and tourism.