Those sub-$300 flight deals are coming back just in time for fall

Inflation may be raising prices across the broader economy, but there's one area where at least some prices are dropping again: airfare.

Flight prices are dropping steadily after surges in spring and summer, according to travel booking service Hopper, which tracks fares.

Domestic airfare will decrease to an average of $286 round trip in August, the company's analysts predicted; this is down from the more than $400 average at the peak of May. Fares are expected to remain below $300 through at least September, before creeping back up through the fall as the holidays approach.

Hopper's price estimates refer to when bookings are made, rather than when the flights take place. In other words, if Hopper's analysis shows prices trending lower in August, that refers to flights purchased in August for travel anytime in the future.

The drop comes following a summer of unusually high prices where demand far outstripped capacity; this pent-up travel demand stemmed from two years of pandemic-era travel restrictions. Surging fuel costs, partly linked to the Russian war in Ukraine, also contributed to higher prices.

While there's typically a seasonal decrease in flight prices during the fall shoulder season, this year's decline is higher than normal, largely because the summer prices peaked so much more than normal, Hayley Berg, Hopper's lead economist, said.

"The height of the summer prices is more the anomaly than the [lower] price of fall travel," Berg told TPG in an interview. "The big drop is more about what happened this summer than it is about prices this fall."

"That all led to kind of this airfare bubble that peaked in the last week of May and early-June," she added. "And now as we head into the fall, we have the seasonal drop in demand and some relief in jet fuel prices."

Scott Keyes, founder of flight deals subscription service Scott's Cheap Flights, agrees.

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"The flights that people are booking right now are no longer for the most expensive time to fly, summer," Keyes said. "There was really a spike in demand as folks felt more comfortable traveling."

The drop also comes as airlines expect to see strong business travel demand this fall, even despite signs of a possible recession.

Notably, however, even though prices are dropping compared to their summer highs, they remain higher than in the recent past.

Published fares — tracked differently than purchased fares — are up 18.5% year-over-year, according to a weekly analysis by financial services firm Cowen; they are up 4.7% compared to last week. Cowen sampled 278 routes and found that domestic one-way fares averaged $368.

More: Relief in sight? Airfares decline slightly after months of huge increases

While there's some disparity between the Cowen and the Hopper data, their different systems of methodology can explain part of that.

Hopper looks at the real-time fares purchased by travelers using various global distribution systems, but Cowen focuses on the published fares. The actual sold fares, which are demand-based, tend to be lower — often significantly so — since the published fares are more of a starting point for airlines' revenue management teams.

This means that while the Cowen data can be useful for examining trends and for investors looking at airline financial projections, the Hopper data is more reflective of what the average traveler can actually expect to pay.

All in all, cheaper flights are finally coming back — just in time to plan for fall travel and the holidays.