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

Aug. 03, 2022
3 min read
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Those sub-$300 flight deals are coming back just in time for fall
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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.

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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.

"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.

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Card Rating is based on the opinion of TPG‘s editors and is not influenced by the card issuer.
4 / 5
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3XEarn 3 Points per $1 spent at Restaurants and Supermarkets
3XEarn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
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    For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening

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  • Annual Fee

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Why We Chose It

The Citi Premier’s 3 points per dollar spent across a wide range of popular categories is one of the more lucrative offerings in the world of points and miles. The Citi Premier comes with a $95 annual fee and is currently offering a solid sign up bonus of 80,000 points after you spend $4,000 on purchases within the first three months. It also has some valuable transfer partners to make the most of your rewards. Add in access to Citi Entertainment plus a $100 hotel credit for any single-stay hotel booking that exceeds $500 or more, excluding taxes and fees, booked through the Citi travel website, there are few reasons why the Citi Premier should not be in every traveler’s wallet.

Pros

  • Earns 3x points on restaurants, supermarkets, gas stations, air travel and hotels.
  • $100 annual hotel savings benefit (on single hotel stay bookings of $500 or more, excluding taxes and fees, booked through thankyou.com)
  • Points transfer to 16 airline programs, from JetBlue to Virgin Atlantic.
  • World Elite Mastercard benefits, extended warranty, damage and theft protection.

Cons

  • $95 annual fee
  • Lacks travel protections that other travel rewards cards come with
  • For a limited time, earn 80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
  • Earn 3 Points per $1 spent at Restaurants and Supermarkets
  • Earn 3 Points per $1 spent at Gas Stations, Air Travel and Hotels
  • Earn 1 Point per $1 spent on all other purchases
  • Annual Hotel Savings Benefit
  • 80,000 Points are redeemable for $800 in gift cards when redeemed at thankyou.com
  • No expiration and no limit to the amount of points you can earn with this card
  • No Foreign Transaction Fees on purchases