While there continue to be a plentiful supply of cheap traveloptions including cheapairplane tickets, discount hotel rooms, and cheap vacation packages, 2017looks to build on 2016 trends towards cheaper ticket prices and more choices oncompetitive routes.
The airline industry benefited in 2016 from low oil pricesand a variety of add-on fees for everything from bags to boarding.
J.D. Power and Associates found in a 2016 survey thattraveler satisfaction with North American airlines hit a 10-year high, due to acombination of improved services and a growing acceptance for a fee heavypricing model.
Airlines have been investing in onboard amenities such asseatback entertainment consoles and Wi-Fi, and both United and American broughtback free snacks in 2016. Delta rolledout an improved snack selection at the end of the year and is testing areintroduction of free in-flight meals on select cross-country flights. The Department of Transportation suggested inDecember that cell phone calls could be allowed on some flights.
Fliers appear to be becoming more accepting of airline a lacarte pricing which enables airlines to offer the cheap fares desired by mostfliers with the option for them to pay more for comfort and convenience.
Cheap base fares make add-on fees easier to swallow. Airline price tracking app Hopper predictsthat the average price of a domestic round trip ticket will bottom out inJanuary at $212. The November averagedomestic fare of $222 was 14 percent less that where it was two years earlier.
While airfares are expected to increase during the firsthalf of 2017, Hoppers $253 average fare prediction for May is cheap byhistorical comparisons. On a worldwide basis,the average round trip airfare is expected to be $351 in 2017 which is 63percent less than in 1995.
Whether become of lower ticket prices, more flight options,or better snacks, there are suggestions that fliers feel that they are gettingmore for their travel dollars today. Studies show that consumer perception of value over the last six monthsof 2016 have crept up for American, JetBlue, and Delta.
Lately competition has been increasing from low costairlines such as JetBlue and Spirit. While airlines understand that fuller flights are more profitable, when facedwith more competition, airlines tend to add flights in order to hang on totheir market share on a particular route.
Aside from oil prices, the overall health of the economywill be another contributing factor to affordable airfares. Given that ultra-low cost airlines tend togrow more quickly than GDP, there will be continued downward pressure onairfares.
Airfares are not expected to go up significantly in2017. Airlines are expected to continueto erode their profits as they battle each other for market share which isgreat news for consumers.
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