Airfares Have Dropped 15% or More Since January 2015
Update: Some offers mentioned below are no longer available. View the current offers here.
Recent data from Hopper and the Bureau of Labor and Statistics reflects news that's surely music to travelers' ears: The drop in oil prices has caused a sharp decrease in airfare.
The airfare modeling and forecasting site Hopper recently reported that the average airfare for January 2016 was 2.53% lower than December, and a staggering 14.2% lower than January 2015. As the icing on the cake, Hopper forecasts that low prices are here to stay for the foreseeable future, since recent global news indicates that there is no near-term rise predicted for crude oil prices.
Meanwhile, the Bureau of Labor and Statistics recently released data that export international airfares — defined as fares paid to US carriers by foreign residents — dropped an astounding 15% in 2015. This is unheard of; the Bureau reported that this is the biggest percentage drop in a calendar year for export fares since 1987, when such statistics started being kept. Import airfares, defined as fares paid to foreign carriers paid by US residents, dropped by 9.9% as well.
The Low-Cost Carrier Effect on Airfares
The "Spirit effect," a reference to what was once the "Southwest effect," is very real. Hopper's analysis of 5,000 domestic nonstop routes shows that the entrance of a low-cost carrier — defined as Spirit, JetBlue and Frontier — caused average airfares to drop by half on aggregate, which in effect caused a 20% decrease in legacy carrier pricing on those routes. That's not to mention the Mint effect — the lower premium transcon prices we're seeing as a result of JetBlue's competitively priced service.
Spirit and Frontier can really be classified as ultra-low cost-carriers, as they specifically cause the biggest disruption, at times lowering particular routes by 70%! Finally, market demand increased a stunning 60% upon the entrance of low-cost carriers; essentially, lower fares tempt people to travel more. Shell-shocked legacy airlines, in a concession of sorts, are starting to offer basic fares in an attempt to compete in a cloudy environment. The good news is that the overall winners here are consumers.
Maximize Your Airfare Purchases
Even when airfares are low, you should maximize your spending by using a card that gives you bonus points or miles on this category of purchase. For example, the Chase Sapphire Preferred Card earns you 2 Ultimate Rewards points per dollar on all travel purchases, which can later be transferred to a variety of airline and hotel partners. Another great option is the American Express Premier Rewards Gold Card, which offers 3 Membership Rewards points per dollar on airfare purchases with a different set of transfer partners.
Have you found airfare to be cheaper in your personal experience?
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.